House Building Industry: More Confident in August

Home builders enjoy more confidence this August compared to the last twelve months as shown in the latest Housing Market Index report from the National Association of Home Builders. The house building industry reached 18, which is the highest confidence level since June last year.

Builders were asked to rate the current situation in the single-family home market in terms of home sales, sales expectations in the next two quarters and estimated buyer traffic. The August composite score was higher by one point compared to July and two points from June.

The HMI has actually started inching up from its January level of 8. For August, it looks like house builders are eyeing a better future, with buyer traffic rate at 16, which is 3 points higher than last month and sales expectations rate almost double of what they gave last February and March.

The NAHB believes that the rise in confidence can be attributed to the tax credit given to first-time house buyers. The association also hopes that even after the November 30 expiration of the said buyer incentive, the momentum will be enough to move the industry towards a steady recovery.

In addition, the report revealed another positive aspect that involves the sales expectation over the coming six months. It certainly reflected gains enjoyed due to the tax credit as well as signs that the industry and the economy is recovering. Home builders obviously believe that the worst is over and recovery is just around the corner.

All the industry needs right now is for Congress to take meaningful steps to make sure that the momentum is prolonged and focus on the recovery of the housing industry is kept. In particular, the house building industry would like a review of the present appraisal guidelines, which has been affecting new homes sales considerably. It would also be better if the tax credit is extended to cover not only first time house buyers but also the other buyers.

By doing so, it will push the national economy to a more stable condition.