Reaching a level that’s the highest it’s been in nearly five years, home builder confidence climbed 4 points from 25 to 29 in February, according to the NAHB/Wells Fargo Home Market Index (HMI). The U.S. Census Bureau and HUD also recently issued a joint report that shows positive gains in housing permits and starts for January. Other recent indicators have demonstrated steady growth as well, which could be a sign that the residential design and building industry is finally headed toward long-term recovery. “This is the longest period of sustained improvement we have seen in the HMI since 2007, which is encouraging,” states NAHB chief economist David Crowe in the February report. “However, it is important to remember that the HMI is still very low, and several factors continue to constrain the market.”
Although Crowe cautions against unbridled optimism, the three components used to calculate the monthly HMI survey—single-family home sales, sales expectations for the next six months, and traffic of perspective home buyers—all showed significant increases. The HMI’s total score of 29 is well below the ultimate goal of 50, which would indicate more surveyed home builders feel the market is healthy versus those who don’t, but this month’s increase marks the fifth consecutive month of rising scores. Further backing up the hope that housing is steadily albeit slowly improving is the U.S. Census/HUD report on residential construction permits, starts, and completions for January 2012. Permits for all privately owned residential buildings, including single-family and multifamily, are 19 percent higher than the same figures for January 2011 and 0.7 percent higher than the previous month’s statistics. Single-family permits alone rose nearly a full percent in January 2012 compared with the previous month. Total housing starts also grew by almost 10 percent versus the previous year and 1.5 percent over December. Single-family starts dropped slightly when compared with the previous month, as did all residential completions, but construction normally slows down in winter. You can view complete charts and figures on the U.S. Census Bureau website.
