Builders Optimistic Despite Market Challenges
The new home market isn't only important to new home buyers. After all, the number of homes being built plays a part in meeting buyer demand, moderating competition, and keeping prices in check. In other words, if the market for newly-built homes isn't doing well, there's a good chance the overall housing market isn't either. That's why the National Association of Home Builders' Housing Market Index is a closely followed indicator. The index measures homebuilder confidence on a scale where any number above 50 indicates more builders view conditions as good than poor. In July, the index scored a 65, with the individual components measuring sales conditions, traffic, and expectations for the next six months all up from the month before. Greg Ugalde, NAHB's chairman, says builders remain optimistic, despite some challenges. “Builders report solid demand for single-family homes,” Ugalde said. “However, they continue to grapple with labor shortages, a dearth of buildable lots, and rising construction costs that are making it increasingly challenging to build homes at affordable price points relative to buyer incomes.” More here.