Homebuilder confidence is higher for the third straight month this month.
According to the National Association of Home Builders/Wells Fargo Housing Market Index, a combination of shrinking new home inventory plus higher-quality foot traffic is boosting builder optimism.
November’s confidence reading of 16 is the highest since June 2010. The Housing Market Index is now above its 3-year trendline, too.
The purpose of the Housing Market Index is to measure “the pulse of the single-family housing market”. The survey is sent to home builders in IL and around the country, asking them to report on their business.
The survey is 3 questions:
- How are market conditions today?
- How do market conditions look 6 months from now?
- How is the prospective traffic of new buyers for new homes?
Responses are then collected, and seasonally-weighted.
Of course, it’s no surprise that builder confidence is rising. The sales of new homes spiked in September, and the jobs market is moving in the right direction. Additionally, low mortgage rates help to attract new buyers, too. Altogether, the outlook in the New Home market is as rosy as it’s been in months.
The downside for new home buyers in Chicago , though, is that, because of their optimism, builders may be unwilling to offer free upgrades or other discounts. Certainly not with sales are expected to return to “federal tax credit” levels, anyway.
Therefore, if you’re in the market for a new home, or expect to be “buying new” in early-2011, you may want to move up your time-frame. Not only are low mortgage rates not likely to last, but neither are low home prices.
