Home Builder Confidence

Oct 30, 2015

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The Housing Market Index, which is based on a survey by the National Association of Home Builders, recently rose 1 point to 61, its highest level since November 2005. This Index is used by builders to determine when they should be building new homes. Given the unbelievable shortage of housing inventory, this is a good sign. We need more inventory. The current number of homes on the market is off by over 50%.

Builders were asked about current sales of new single-family houses, sales expectations for the next six months, and traffic of prospective buyers.

The answers:

  • Current sales are up.
  • Buyer traffic is up.
  • Sales expectations are unchanged.

Home builders’ biggest challenges are workers and finding land to build on. Also, the Colorado Construction Defects law is onerous for builders. This keeps many builders out of Colorado. Nonetheless, it has been nearly 10 years since home builders have been this confident about the housing market. We expect to see more homes being built in the months to come.

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