Builder Confidence Hits 11-Year High

There is no shortage of optimism in the home building industry: The latest the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) jumped seven points to 70, its highest level since July 2005.

All three HMI components increased this month—the component gauging current sales conditions rose by seven points to 76, the index charting sales expectations in the next six months increased nine points to 78, and the component measuring buyer traffic took a six-point flight to 53, marking the first time this gauge has topped 50 since October 2005. All four regional HMIs also took an upswing.

NAHB Chairman Ed Brady gave credit to the incoming presidential administration for the new degree of can-do spirit.

“This notable rise in builder sentiment is largely attributable to a post-election bounce, as builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” said Brady, a home builder and developer from Bloomington, Ill. “This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years.”