According to the April 2015 Housing Market Index (HMI) report, home builder confidence is on the rise in the U.S., particularly on newly built, single-family homes.
The report, released today by the National Association of Home Builders (NAHB) and Wells Fargo, indicates that builder confidence has increased four points–going from 52 to 56–since this time last month. In March, these numbers were actually down one point from the month previous.
Much of this increased confidence, the report says, is due to consistently low interest rates and increased job growth throughout the country.
But improved builder confidence isn’t the only thing the HMI survey found. The report also shows jumps in other measurables as well. Builders’ expected buyer traffic increased four points, current sales conditions rose three points, and future sales expectations saw an increase, too, jumping from 59 to 64 points in the last month.
According to NAHB Chief Economist David Crowe, these sales expectations numbers are at the highest level they’ve been all year–a good omen for the months to come.
“This uptick shows builders are feeling optimistic that the housing market with continue to strengthen throughout 2015,” Crowe said.
NAHB’s report also sheds light on regional differences in the housing industry. While the South and Northwest saw distinct rises in their HMI scores, the Midwest and West regions decreased, dropping by two and three points, respectively.
According to NAHB’s Eye on Housing, these lower scores may be due to problems with lot availability, labor availability and other scarcities in the regions. Additionally, construction, land and labor costs are also on the rise, which makes it difficult for many builders to negotiate on pricing.
The HMI report is derived from a monthly survey conducted by the NAHB. The survey asks home builders across the U.S. to rate their perceptions of current sales conditions, as well as their sales expectations for the next six months, as either “good,” “fair,” or “poor.” It also asks builders if their rate of prospective buyers is “high to very high,” “average,” or “low to very low.” These scores are then averaged, and any score over 50 indicates generally positive conditions in the market. To see this month’s HMI report and tables for yourself, visit NAHB.org.