Builder Confidence Finishes Year Close to Highs

Builder confidence as measured by the NationalrnAssociation of Home Builders (NAHB)/Wells Fargo Home Market Index (HMI) fellrnback slightly in December after a four point uptick in November, and is endingrnthe year just about where it began.  ThernHMI which is designed to indicate the home builder perceptions of the marketrnfor new single-family homes, was at 57 this month, down from 58 in November andrnone point higher than in January 2014. rnThe index has fluctuated from a low of 45 in May to 59 in September.</p

NAHB Chairman Kevin Kelly said, “Members in many marketsrnacross the country have, seen their businesses improve over the course of thernyear, and we expect builders to remain confident in 2015.” </p

NAHB constructs its index each month from a survey of itsrnhomebuilder members in which it asks three questions to gauge their perceptionsrnand expectations about the market. rnBuilders are asked if they consider the current sales market “good,”rn”fair” or “poor” and to similarly grade what they expect the market to be overrnthe next six months.  They are also askedrnto rate traffic of prospective buyers as “high to very high,” “average” or “lowrnto very low.”  The answers are seasonallyrnadjusted into component indices and a composite where any score over 50</bindicates that more builders view conditions as good than poor. </p