The National Association of Home Builders (NAHB) and Wells Fargo reported that the Housing Market Index (HMI) eased marginally, down from 71 in February to 70 in March. Yet, the headline measure remained not far from December’s reading (74), which was the best since July 1999. More importantly, homebuilders are very optimistic about the next six months, despite the index for expected sales of single-family homes declining from 80—the best reading since June 2005—to 78. NAHB Chairman Randy Noel noted, “Builders’ optimism continues to be fueled by growing consumer demand for housing and confidence in the market.” NAHB Chief Economist Robert Dietz added, “A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise.”
To put the current numbers in perspective, the HMI stood at 58 and 71 in March 2016 and March 2017, respectively. Readings greater than 50 suggest that more homebuilders are positive than negative in their economic outlook. The HMI has exceeded 50 in every month since July 2014 and has surpassed 60—which would signify robust growth—for 19 straight months. In the latest data, sentiment strengthened in the Northeast, but was somewhat softer in other regions.