Homebuilders keep confident moving into 2017


Builder confidence remained steady at the start of 2017 as many look to the new administration, hopeful for a change.

Builder confidence dipped slightly to 67, down from December’s downwardly revised 69, according to the National Association of Home Builders and Wells Fargo Housing Market Index.

While this is a slight decrease, it’s important to remember that December ended 2016 with the highest level of confidence since July 2005.

“Builders begin the year optimistic that a new Congress and administration will help create a better business climate for small businesses, particularly as it relates to streamlining and reforming the regulatory process,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

Under the new administration, home builders are predicted strong growth for 2017, however they still hold reservations.

“NAHB expects solid 10% growth in single-family construction in 2017, adding to the gains of 2016,” NAHB Chief Economist Robert Dietz said. “Concerns going into the year include rising mortgage interest rates as well as a lack of lots and access to labor.”

Derived from a monthly survey that NAHB has been conducting for 30 years, the index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as high to very high, average or low to very low. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI components decreased in January. The component measuring current sales conditions decreased three points to 72, while the index charting sales expectations in the next six months decreased two points to 76 and that measuring buyer traffic decreased only one point to 51.

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