“In a sign that housing continues to lead the economy forward, builder confidence in the market for newly-built single-family homes increased six points to 78 in August, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today,” said the first release.
“The HMI now stands at its highest reading in the 35-year history of the series, matching the record that was set in December 1998.”
“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI,’ said Chuck Fowke, chairman of the NAHB.
“However, the V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid-April. Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates.”
In a further sign that housing continues to boost the economy, single-family and multi-family starts each posted solid gains in July, with total housing production up 22.6% to a seasonally adjusted annual rate of 1.50 million units, according to the August 18 press release. This is the highest production rate since February.
“The July reading of 1.50 million starts is the number of housing units builders would begin if they kept this pace for the next 12 months,” said the release. “With this overall number, single-family starts increased 8.2% to a 940,000 seasonally-adjusted annual rate. The multifamily sector, which includes apartment buildings and condos, increased 58.4% to a 556,000 pace.”
“The market is being buoyed by historically low interest rates, a focus on the importance of housing, and a shift to the suburbs as more buyers are seeking homes in suburban communities, exurbs, and more affordable low-density markets,” said Robert Dietz, chief economist for NAHB.