Confidence Building: Homebuilder’s Confidence in Housing Market Reaches 7 Year High

The heat index isn’t the only thing rising rapidly over the past three months. Since May, homebuilder’s “…confidence in the market for newly built, single-family homes rose…to 57 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).” This is the highest index score since January of 2006.

The HMI scale, with a rating of 50 being the line between positive and negative sentiment, has shown significant improvement since a 2013 low of 42 back in April. June was the first month since 2006 where the index indicated a favorable rating, at 52. The most promising statistic from July is the Future Sales component of the index, which displays an index-high score of 67. Present Sales are also very strong, showing a 5 point gain and reaching 60 on the index. In addition, reports on housing starts are also looking favorable with economists forecasting that “…home construction likely grew at an annualized pace of 959,000 units last month, faster than May’s 914,000 unit rate which would be its quickest pace since March.”

These positive results represent builders “…seeing more motivated buyers coming through their doors as the inventory of existing homes for sale continues to tighten,” according to the index’s Chief Economist, David Crow. These motivated buyers are coupled with the decrease of “…some previously sky-rocketing building material costs” to provide builders a lower cost for these willing buyers. With the future looking so appealing for homebuilders, the right software decisions are crucial to staying organized, tracking changes, and maintaining growth. An ERP solution will help support changing demands with the flexibility to accommodate new business processes. Visit the SBS Group at http://www.sbsgroupusa.com to learn more. You can follow us on Twitter and like us on Facebook.


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