The National Association of Home Builders (NAHB) and Wells Fargo reported that the Housing Market Index (HMI) increased from 69 in November to 74 in December, its best reading since July 1999. 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 16 straight months, averaging 67.1 over that time frame.
NAHB Chief Economist Robert Dietz highlighted the healthy outlook for 2018, saying, “With low unemployment rates, favorable demographics and a tight supply of existing home inventory, we can expect continued upward movement of the single-family construction sector next year.”
Along those lines, homebuilder optimism remained strong in the latest data. The index for current single-family sales jumped from 77 to 81, with sales expectations for activity over the next six months also highly elevated, up from 76 to 79. The largest gains in perceptions were in the West, with sentiment slipping somewhat in the Northeast. More importantly, HMI data exceeded 50 in all regions of the country, illustrating mostly positive news for the housing sector overall.
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