The National Association of Home Builders (NAHB) reported Thursday that its Housing Market Index rose three points to a reading of 59 for August.
Confidence among builders is likely growing in connection with stronger housing markets and high demand for homes. These conditions are being driven by short supplies of homes for sale in many markets.
Builder confidence in current market conditions rose by three points to a reading of 62, while builder confidence in market conditions within the next six months rose by one point to a reading of 68. Confidence in buyer foot traffic was unchanged from July’s reading of 45.
Readings above 50 indicate that more builders surveyed view housing market conditions as positive rather than negative; there was some concern that the high builders’ confidence reading could trigger the Fed to announce the tapering of its $85 billion monthly purchase of Treasury securities and mortgage-backed securities.
Housing Starts Driven By Apartment Construction
Housing starts rose in July, but were led by the volatile apartment sector rather than single- family homes.
On Friday, the U.S. Department of Commerce reported 896,000 housing starts on a seasonally adjusted annual basis. This reading fell short of expectations of 915,000 housing starts, but exceeded June’s reading of 846,000 housing starts.
Starts for residential buildings with five or more units rose by 20.90 percent year-over-year while construction of one of one-to-four family residential buildings fell by 2.20 percent. Demand for rental properties and a shortage of available single family homes was seen by economists as contributing to increasing multi-family housing construction.
Analysts said that some home builders may be holding back on single-family home construction due to increasing materials and labor costs, but this doesn’t reflect the record level of builder confidence reported in the NAHB Housing Market Index.
Building homes at less than optimum capacity isn’t good news for the shortage of available single-family homes. Rising mortgage rates are also a concern for home builders, as fewer borrowers may be able to qualify for mortgage loans needed for financing home purchases.
Building permits numbers were also released on Friday, and presented a more positive picture than housing starts. July’s reading for building permits issued rose by 2.70 percent in July to an annual reading of 943,000 permits against expectations of 953,000 permits issued and exceeded June’s reading of 918,000.
Building permits issued provide an indication of future housing starts.
Last week wasn’t kind to stock market investors, but weekly jobless claims fell to an unexpected low of 320,000 new jobless claims filed, the lowest level in nearly six years.
August means it’s time to get your children ready for school once more. Picking out backpacks, going clothes shopping and finding all the right school supplies can be hectic enough.
So you want to renovate your home, but you don’t have the cash at the moment for the project and you don’t qualify for a home equity line of credit?
Are you applying for a mortgage on your home? Keep in mind that a mortgage is a major financial decision and choosing one will have a significant impact on the rest of your life.
Highlights of economic news from last week, include a survey of senior loan officers from U.S. and foreign banks doing business in the U.S.
Summer always brings with it a hard choice: Do you turn down the thermostat to stay cool and resign yourself to high power bills? Or, do you sweat it out to save some dough?
U.S. housing markets continue to drive the economic recovery according to data released by RealtyTrac Inc.