November 20th, 2013
The latest NAHB/Wells Fargo Housing Market Index was released Nov. 18 and revealed that homebuilders still have a great deal of confidence in the U.S. housing market. The score was stable at 54 in November, matching October’s downwardly revised number. Although this month didn’t see the increase economists were expecting, this stability is improvement over the score’s previous two months of decreases.
Based on annual surveys of homebuilders, the index is compiled and a rating is assigned, where any number above 50 is positive, indicating that more homebuilders are optimistic about the market than not. In this way, 54 is a good sign for the housing market and economy as a whole.
“The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline,” said NAHB Chief Economist David Crowe.
According to Reuters, analysts point to rising mortgage rates as the main cause for disruption in the housing market’s growth right now, but these increases don’t seem to be discouraging buyers. Even as rates rise, they are still at an affordable level.
“Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes,” said NAHB chairman, Rick Judson.