The National Association of Home Builders (NAHB) and Wells Fargo reported that the Housing Market Index (HMI) increased from 68 in October to 70 in November. That is the highest figure since March (71), which was the best reading since July 2005. As such, builders remain very positive in their outlook, with index readings greater than 50 indicating favorable conditions in the overall outlook for the sector. The headline index has now exceeded 60 for 14 straight months, averaging 66.7 over that time frame. NAHB Chief Economist Robert Dietz said, “Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory.” On the latter point, respondents also cited ongoing challenges in attracting workers and with raw material price increases.
In November, homebuilders were slightly more upbeat about current single-family sales activity (up from 75 to 77), with sales expectations for the next six months (down from 78 to 77) remaining quite elevated despite easing marginally in the latest survey. The largest gains in perceptions were in the Northeast, with improvements also seen in the South and West.