Builder Confidence Was Steady Heading Into Election

Builder confidence in the market for newly-built single-family homes was unchanged in November, based on data gathered before the election. The National Association of Home Builders said its Housing Market Index (HMI), which it sponsors jointly with Wells Fargo, remained at the October level of 63. The index had surged six points in September, tying with October 2015 for the highest score since the mid-2000s, retreating to its current level the following month. The November reading was exactly what had been expected by analysts polled by Econoday.

"With most of our members responding before the November elections, confidence levels remained unchanged as they awaited the results," said NAHB Chairman Ed Brady.  "Still, builder sentiment has held well above 60 for the past three months, indicating that the single-family housing sector continues to show slow, gradual growth."

"Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector. This will help keep housing on a steady, upward glide path in the months ahead," said NAHB Chief Economist Robert Dietz.

The HMI is derived from a survey NAHB has been conducting among its new home builder members for 30 years.  The survey asks respondents to give their 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.

The HMI component measuring buyer traffic rose 1 point to 47 while the component measuring sales expectations over the next six months was down 2 points to 69.  Builder sentiment regarding current sales conditions was unchanged at 69.

Regional scores are reported as three month moving averages.  The Northeast rose 2 points to 45, the Midwest was also up 2 points to 58 and a 2-point gain put the West at 77.  The South was unchanged at 66.