Homebuilder Confidence is on the rise once again.
After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.
The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.
The HMI has not been above 50 since April 2006.
The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.
The survey 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?
This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.
With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.
The basics of supply-and-demand portend higher new home prices later this year — a potentially bad development for buyers of new homes in NH and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer “upgrade packages” to buyers of new homes.
If you’re shopping for new construction in or around Derry , therefore, consider moving up your time frame. Home affordability is high today. It may not be tomorrow.
There are great programs and rates available. Give me a call today to benefit from the experience of a local lender!
Senior Loan Consultant
(603) 232-9617 Direct
Residential Mortgage Services, Inc
Licensed by the State of New Hampshire Banking Department
For information purposes only and is not a commitment to lend as defined by Regulation Z, Section 226.2. Programs, rates, terms and conditions are subject to change at any time. Availability dependent upon approved credit and documentation level, acceptable appraisal, and market conditions. Residential Mortgage Services, Inc. is a Maine Corporation headquartered at 24 Christopher Toppi Drive, South Portland, ME 04106. NMLS ID# 1760; ME Supervised Lender License No. SLM2537; Licensed by the New Hampshire Banking Department, NH Mortgage Banker License No. 8816-MB; MA Mortgage Lender License No. MC1760; MA Mortgage Broker License No. MC1760; CT Mortgage Correspondent Lender License No. 14352; RI Lender License No. 20092626LL; RI Loan Broker License No. 20122931LB; NY Mortgage Banker License No. B500942; FL Mortgage Lender License No. MLD232