Housing Market Index Signals Solid Confidence Among Home Builders

The housing market index, unchanged for a third straight month at 58 in April, continues to signal solid confidence levels among home builders. Components are mixed with present sales continuing to lead the way though they did dip 2 points to 63. Right behind, in a very good sign, are expectations for 6-month sales which are up 1 point to 62. Still lagging is traffic, at 44 for a 1 point gain.

Regional composite data continue to show the West far out in front, unchanged at 67 and underscoring the importance of this region for the nation's new home sector. The South, which is the largest housing region, is unchanged at 59 with the Midwest close behind at 56. The Northeast, the smallest for new homes which reflects the region's full development, trails in the distance at 44.

The availability of jobs together with low mortgage rates are solid pluses for the new housing outlook. A negative, however, is low traffic, reflecting lack of participation by first-time buyers who continue, in what is perhaps a lingering effect from the 2008 housing collapse, to prefer to rent.

Recent History Of This Indicator:
A gain is expected for the housing market index which has been solid but not accelerating. Though both strong, current sales and future sales are being held back by limited construction capacity, including shortages in labor.