U.S. home builders are clearing feeling more confident this summer. A monthly measure of the health - and confidence of builders and new home buyers - exceeded expectations during June. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) rose four points to 49, only one point shy of the threshold for what is considered good building conditions.
“After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign and shows some renewed confidence in the industry,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “However, builders are facing strong headwinds, including the limited availability of labor.”
Here's how the survey works:
Builders rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for various components are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
Here's how all three index components performed this month:
- The component gauging current sales conditions increased six points to 54.
- The component gauging sales expectations in the next six months rose three points to 59.
- The component measuring buyer traffic increased by three to 36.