According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) [1] survey builders’ confidence is on the rise.
In June, the survey found builder confidence for new single-family homes rose 21 points to 58—anything over 50 represents a positive market.
Reasons for this include factors such as the presence of a tight housing inventory, as well as increasing amounts of mortgage applications being submitted. Other elements supporting this optimistic belief are current, low-interest rates. All of these factors are showing to bolster consumer confidence, with statistics reporting that buyer interest and movement has increased exponentially (more than doubling) in just one month (when compared with May). Builders have also reported an uptick in phone calls and online interest from consumers for their services.
According to the survey, these same builders point to an especially increasing demand in one particular niche: families seeking single-family homes in inner and outer suburbs that feature lower density neighborhoods.
The HMI gauging current sales conditions rose 21 points to 63 and the component measuring sales expectations over the next six months increased by 22 points to 68. Also, the chart measuring prospective buyers rose 22 points to 43.
The Northeast region had the largest gain, rising 31 points to 48.
The survey, however, also found there still are the factors of a devastatingly high amount of unemployment and the constant fear in people’s minds of a second wave of the virus being imminent. Both of these—neon signs promoting feelings of insecurity and instability—propose clear and present danger to the housing market’s fast recovery.