The National
Association of Homebuilders (NAHB) reported on Monday its housing market index
(HMI) increased to 46 in November
from an unrevised October reading of 43. This
marked the highest reading since April (51).
Economists had expected the HMI to advance to 44.
A reading over
50 indicates more builders view conditions as good than poor.
All three major
HMI components demonstrated increases in early November. The
component charting sales expectations in the next six months soared 7 points to
64, while the component measuring traffic of prospective buyers jumped by three
points to 32, and the component tracking current sales conditions leapt 2
points to 49. Meanwhile,
Commenting on
the latest report, NAHB Chairman Carl Harris said that with the elections in
the rearview mirror, builders were expressing increasing confidence that
Republicans gaining all the levers of power in Washington would result in
significant regulatory relief for the industry that would lead to the
construction of more homes and apartments. “This is reflected in a huge jump in
builder sales expectations over the next six months,” he added.
Meanwhile, NAHB Chief Economist Robert Dietz noted
that while builder confidence is improving, the industry still faces many
headwinds such as an ongoing shortage of labour and buildable lots along with
elevated building material prices. “Moreover, while the stock market cheered
the election result, the bond market has concerns, as indicated by a rise for
long-term interest rates,” he added. “There is also policy uncertainty in front
of the business sector and housing market as the executive branch changes
hands.”