Published on November 05, 2015
According to the National Association of Home Builders/Wells Fargo Housing Market Index, builders are becoming more confident in the market for single-family homes.
"With October's three-point uptick, builder confidence has been holding steady or increasing for five straight months," said the NAHB Chief Economist David Crowe "This upward momentum shows that our industry is strengthening at a gradual but consistent pace. With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015."
Builder confidence increases in October
The NAHB/Wells Fargo Housing Market Index is created using results from a survey that gauges how builders are feeling about the following factors:
According to the index, builder confidence rose three points to a level of 64, the highest it's been since the end of the housing boom in 2005.
"Builder confidence rose three points to a level of 64."
"The fact that builder confidence has held in the 60s since June is proof that the single-family housing market is making lasting gains as more serious buyers come forward," said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. "However, our members continue to tell us there are still pockets of softness in some markets across the nation, and that they face challenges regarding the availability of lots and labor."
The Urban Land Institute confident in market as well
In addition, the ULI's Real Estate Consensus Forecast, which measures confidence in the real estate industry over the course of the next three years, indicated strong economic and job growth will further propel the housing industry.
The overall health of the economy will remain in good standing for the next three years. Gross domestic product growth is expected to remain steady in 2015, then it is forecast to strengthen in 2016 at 2.8 percent and in 2017 at 2.7 percent.
The job situation is especially conducive to an improving real estate market. Unemployment is projected to continue to decrease in 2015, 2016 and 2017 to 5 percent, 4.9 percent and 4.8 percent, respectively.
A strong economy and improving job situation will help support a stronger real estate market for the next three years as more individuals are able to afford a new home.