Confidence Remains High Heading Into Busy Season
Home builder confidence in the housing market stayed strong in March, and it isn’t showing signs of decreasing any time soon.
Home buyer confidence increased in March as well. Single-family new home sales rose 2 percent in February, a good sign for the housing market going into the busy spring buying season.
The increase in new home sales is fueling builder confidence. Home buyers should be confident in the housing market as well since new homes are being built at a healthy pace, and mortgage rates are near some of their lowest levels in the past three years.
The housing market was expected to be one of the strongest sectors of the economy in 2016. So far, the housing market has performed even better than expected.
Those shopping for a new home can benefit in any market, and one in which home builders’ outlook is positive is no exception.
Builder Confidence Remained Strong In March
Each month, the National Association of Home Builders (NAHB) reports builder confidence. Any score above 50 is viewed as “confident.” The NAHB’s March Home Builder Confidence Report revealed that builder confidence remained unchanged from February at a level of 58.
Builder confidence is one of the best ways to measure the health of the housing market. New homes take 3 to 6 months to complete, so new homes are built with the expectation that buyers will pay for them once complete..
Home builders keep a pulse on the market and the economy. If they sense negative winds of change, they stop building as many houses.
If the pool of buyers were to dry up, builders stand to lose profits or even their business.
But builders are not slowing down. In fact, they continue to see the economy as able to support continued new home construction.
“While builders contend with industry headwinds such as labor shortages, relatively low mortgage interest rates and solid job growth should keep the housing market moving ahead as we enter the spring buying season,” said NAHB Chief Economist Robert Dietz.
NAHB Chief Economist David Crowe agrees with Dietz’s sentiments and recently stated, “solid job growth, low mortgage rates and improving mortgage availability will help keep the housing market on a gradual upward trajectory in the coming months.”
New Home Construction Is Growing Nationwide
In February, single-family production of housing units increased 7.2 percent. This puts the total number of new single-family homes at an annualized rate of 822,000 units—its highest level since November 2007.
Over the past year, the number of available homes was steadily decreasing. Buyer demand has been high, and demand is not likely to slow down in the next few months.
Builders are trying to fill the gap between buyer demand and available homes. The construction of new homes is helping with the shortage, but.
Mortgage rates have been steadily falling throughout 2016 helping keep homes affordable while raising confidence.
However, mortgage rates also change frequently. To ensure that you’re getting the best rate, keep up with current rates available to you.