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Builder Confidence Skyrockets, Matching 1988 Record
Monday, August 17, 2020
Builders have tied their 32-year old record for confidence
as measured by the National
Association of Home Builders/Wells Fargo Housing Market Index (HMI). The Index,
which has been conducted by NAHB for 35 years, jumped by 6 points in August to
78 and is also 6 points higher than it was in March, before the COVID-19
pandemic shut down some construction sites and shut in much of the buying
public. The last time the HMI was this high was in December 1988. Builders also
set a survey high with their perceptions of buyer traffic. Derived from a monthly survey that
NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market
Index gauges builder perceptions of current single-family home sales and sales
expectations for the next six months as "good," "fair" or "poor." The survey
also asks builders to rate traffic of prospective buyers as "high to very
high," "average" or "low to very low." Scores for each component are then used
to calculate a seasonally adjusted index where any number over 50 indicates
that more builders view conditions as good than poor.
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