The National Association of Homebuilders (NAHB) announced on Monday its
housing market index (HMI) increased to 37 in December from an unrevised November reading of 34. This marked the first rise in builder confidence
in five months.
Economists had expected the HMI to grow to
36.
A reading over 50 indicates more builders view conditions as good than
poor.
Two of three major HMI components recorded gains in early December. The
component charting sales expectations in the next six months surged 6 points to
45 and the component measuring traffic of prospective buyers jumped 3 points to
24. Meanwhile, the component tracking current sales conditions remained unchanged at 40.
Commenting on the latest report, NAHB Chairman Alicia Huey said that with
mortgage rates down roughly 50 basis points over the past month, builders are
reporting an uptick in traffic as some prospective buyers who previously felt
priced out of the market are taking a second look. “With the nation facing a
considerable housing shortage, boosting new home production is the best way to
ease the affordability crisis, expand housing inventory and lower inflation,”
she added.
Meanwhile, NAHB Chief Economist Robert Dietz suggested that the housing
market appears to have passed peak mortgage rates for this cycle, and this
should help to spur home buyer demand in the coming months.