Aug 16, 2012 | Housing Analysis
Home builder confidence rises again.
For August 2012, the National Association of Homebuilders reports the monthly Housing Market Index at 37 — an increase of more than 100% from one year ago and the highest HMI value since February 2007.
The Housing Market Index is an indicator of homebuilder confidence and when it reads 50 or better, the HMI suggests favorable conditions for home builders. Readings below 50 suggest unfavorable conditions for builders.
Despite the recent rise in home builder attitudes, however, the Housing Market Index remains mired below 50 where it’s been since April 2006.
For new construction home buyers in Massachusetts , the HMI may offer insight into the market for new homes through the end of this year. This is because the NAHB Housing Market Index is a composite survey, meant to gauge builder sentiment in three specific areas — current business, future business, and buyer activity. (more…)
Aug 15, 2012 | Housing Analysis
Rising home prices are taking a toll on today’s home buyers. For the first time in 4 quarters — and despite falling mortgage rates — home affordability is sinking.
Earlier this week, the National Association of Home Builders reported the Home Opportunity Index, a measure of home affordability, down to 73.8 for the second quarter of the year. This marks the metric’s first “down” quarter since the second quarter of 2011, and is its lowest reading since December 2010.
A home is considered “affordable” when its payments meet standard mortgage underwriting criteria for families earning the local median income. This definition is used for homes across all U.S. markets — including for homes in Worcester County area.
73.8% of homes sold last quarter were affordable to households earning the national median income of $65,000. This is the 13th straight quarter dating back to 2009 that the index surpassed 70. Prior to 2009, the Home Opportunity Index had not crossed 70 even one time. (more…)
Aug 9, 2012 | Housing Analysis
80 U.S. metropolitan markets are showing “measurable and sustained growth” this month, according to the National Association of Homebuilders’ Improving Market Index.
It’s good news for the economy and good news for housing.
The NAHB’s Improving Market Index is meant to identify U.S. markets in expansion. It’s a composite of the three distinct data sets which, as a group, present a more holistic view of a given city’s growth :
- From the Bureau of Labor Statistics, the IMI tracks employment figures
- From Freddie Mac, the IMI tracks home price data
- From the Census Bureau, the IMI tracks single-family building permits
The home builder trade group compiles this data and, in order for a given metropolitan area to earn the label “improving”, the area must meet two specific growth conditions. (more…)
Jul 18, 2012 | Housing Analysis
Homebuilder confidence is soaring.
For the second time in three months, the National Association of Homebuilders reports that the Housing Market Index made sizable gains.
The Housing Market Index measures homebuilder confidence in the new construction market and is scored between 1-100. Readings above 50 indicate favorable conditions in the single-family new home market. Readings below 50 indicate poor conditions.
The Housing Market Index leaped to 35 in July, a 6-point improvement and the index’s biggest one-month gain since September 2002.
The HMI is now up 14 points this year and is more than double its value of one year ago.
The Housing Market Index itself is a composite of three separate survey questions sent to NAHB members monthly. The questions are basic :
- How are market conditions for the sale of new homes today?
- How are market conditions for the sale of new homes in 6 months?
- How is prospective buyer foot traffic?
For July 2012, home builders reported huge gains. Current home sales are up 6 points; sales expectations for the next six months are up 11 points; and buyer foot traffic is up 6 points.
All three survey answers made 5-year highs. Not since 2007 has sales volume and foot traffic been as strong, and over the next 6 months, builders expect a blow-out finish to the year.
It’s no surprise, either.
Low mortgage rates throughout Worcester County area have lowered monthly housing payments to levels below monthly rent for a comparable home. Plus, programs such as the FHA 3.5% downpayment program continue to help first-time buyers get in homes.
There is a downside to rising homebuilder confidence, however. When builders (more…)
Jul 11, 2012 | Housing Analysis
Where economic growth goes, housing growth often follows.
That’s why it’s good news for homeowners that 84 U.S. metropolitan areas are showing “measurable and sustained growth” this month, according to the National Association of Homebuilders’ Improving Market Index.
The Improving Market Index is a derivative report, based on the results of three separate data series which examine a city’s local economy.
The data series used in the IMI are :
- Employment data from the Bureau of Labor Statistics
- Home price data from Freddie Mac
- One-unit building permits from the Census Bureau
The NAHB compiles this data monthly, assigning a given metropolitan area the label “improving” if the following two conditions are met. First, all three data series above must show growth (more…)
