After a year of declines, building sentiment starting in 2023 with an insignificant increase, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reportopened on Wednesday.
In January, the market confidence index for new single-family homes rose four points Reading of Decemberat an index value of 35.
The NAHB/HMI report is based on a monthly survey of NAHB members, in which respondents are asked to rate all current market conditions for new home sales and expectations for the next six months, as well as new customer transactions. house Scores for each part of the construct confidence survey are used to calculate an index, and any number greater than 50 is indicated. but more builders see the situation better than not.
The NAHB shows an increase with a slight decrease in it mortgage rates at the end of last year.
“Elevated construction sentiment means lower turnover for allow and start it appears to be close, and the recovery for building construction could be done as late as 2023,” said Jerry Konter, Chairman of the NAHB, in a statement.
The director general of the economic organization is also expected.
“While the NAHB sees a decline in single-family starts this year compared to 2022, it looks like a turnaround for housing lies ahead,” Robert Dietz said in a statement. . “Next quarter, single family home construction will increase as mortgage rates are expected to decrease and housing affordability will increase. . The improvement in housing capacity will increase the demand for housing, as the country struggles with a housing shortage of 1.5 million units.”
Three other indices monitored by the NAHB also posted gains in January. The current sales average rose to 40, up four points month-on-month. The group’s estimate of sales expectations for the next six months rose two points to a reading of 37 and an index that tracks consumer sentiment rose three points from December’s reading. the 23rd.
Regionally, the three-month moving average for HMI points published mixed results, with the West gaining one point in the reading of 27, the South it’s stuck at 36, with the Northeast and Midwest falling as low as 33 and 32, respectively.
Another study, the BTIG/HomeSphere State of the Industry Report, a high level of home perception was also reported. According to the survey, 71% of builders saw a decrease in sales last month, the same as November. Despite a 70% year-on-year decrease in traffic, the builder reported a slight improvement in performance compared to expectations and 11% of respondents reported that sales exceeded expectations. and 35% reported that sales were worse than expected. These rates increase by 10% and 50%, respectively, in November.
“Conditions continue to slow due to high mortgage rates, fears of falling real estate prices and weak consumer confidence,” said Carl Reichardt, a BTIG analyst. , in a statement.
The BTIG / HomeSphere survey is an electronic survey of approximately 50-100 small to mid-sized home builders that sell, on average, 50-100 homes per year across the country. In December the survey had 91 respondents.
Despite the positive outlook, builders are still cutting prices and using incentives to sell homes, with 29% of survey respondents reporting that they have cut some, most or all of the underlying costs and 41% reported compulsive use.
“It seems that the lowest point for the construction sentiment in this cycle was recorded in December, even if the majority of construction workers continue to use many incentives, including price reductions, it encourages sales,” Konter said.