According to recent July reports from the NAHB/Wells Fargo Housing Market Index (HMI), the housing market is looking to be ready to lead a post-COVID economic recovery. Based on the data, builder confidence for new construction single-family homes has jumped 14 points to 72 this month, placing the HMI at the pre-pandemic reading we saw prior to the COVID-19 (coronavirus) outbreak. While this is not a predictor of the housing market trends, it does reflect builders confidence in sales and inventory.
This NAHBA/Wells Fargo Housing Market Survey has been conducted for 30 years. Its purpose is to gauge builder perceptions of the single-family housing market. The monthly survey asks respondents to rate market conditions of new homes at the present time and in the next six months, as well as to measure the traffic of prospective buyers.
Despite the economic uncertainty surrounding the crisis, builders are seeing high traffic and a strong interest in new construction homes. Two big factors contributing to this include the historically low interest rates fueling demand, as well as the short supply of existing resale homes. Overall, experts are expecting the housing market to lead to economic recovery.
While builder confidence is on the rise, it doesn’t mean this strong rebound won’t come with some challenges. According to Chief NAHB Economist Robert Dietz, the price for lumber and other essential building materials have drastically increased while lot and skilled labor remains an issue of concern.
However, even with these setbacks, the market is still managing to benefit due to geographical shifts in home interest. Lower density areas such as suburban metro and rural markets are experiencing higher demand for larger homes as more buyers anticipate telework opportunities in the future.
To access the recent HMI tables and learn more about the recent housing statistics, visit www.nahb.org/hmi. You can also stay up-to-date on the latest housing market news on Atlanta Real Estate Forum here.