Good News in The Housing Market Across The Country
November 29, 2012
The housing news seems to be good news all across the country. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for November, the market for newly built single-family homes rose five points marking seven straight months of gains. Builder confidence has reached its highest level since May 2006. All across the country builders are reporting an increased demand as the number of foreclosures and distressed properties have decreased. "In view of the tightening supply and other improving conditions," Says NAHB Chairman Barry Rutenberg, "Many potential buyers who were on the fence are now motivated to move forward with a purchase and take advantage of today's favorable prices and interest rates." This is a huge improvement over last year where the HMI stood at 19 points; that's 27 points below this most recent release. For more information on the NAHB/Wells Fargo Housing Market Index and more in depth analysis please visit NAHB While builder confidence is going up, so too is buyer confidence. According to reports, in October the consumer confidence index increased to 72.2 up nearly 4 points since September, and at its highest since February 2008 just two months into the recession. While a level of 90 points marks a healthy economy -- last reached in December of 2007 -- it's a far cry from the all time low of 25.3 in February of 2009. Some prime reasons consumer confidence has grown in the last several months can be attributed to higher stock prices, the leveling out of gasoline prices, and an increase in home values. The economy grew at a 2% annual rate in the July-September quarter, up from 1.3% in the April-June quarter. September marked a 2.8% rise in home building. This increase pushed construction spending to a seasonally adjusted annual rate of $851.6 billion, 14.1% higher than a 12-year low hit in February 2011. Although new homes represent less than 20% of the housing sales market, they have a large impact on the economy. According to the NAHB, each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue. In September the Federal Reserve said it would spend $40 billion a month to buy mortgage-backed securities to give a boost to home sales in hopes that it will support faster economic growth and stronger gains in the job market. All across the country housing news is good news.