Home Builders Hold Great Confidence For New Homes Over Next 6 Months

The National Association of Home Builders (NAHB) Wells Fargo Housing Market Index (HMI) report for April shows that builder confidence slipped by two points to a rating of 42 from the March reading of 44.

The Housing Market Index (HMI) measures home builder confidence in market conditions for newly built single family homes.

A reading of more than 50 indicates better than average confidence, while readings below 50 indicate that home builders have concerns about current market conditions.

NAHB Housing Market Index Results For April

Home builders expressed concern over a gap between a growing demand for homes and builders' ability to meet the demand for new homes as housing market conditions improve.

Top concerns cited by home builders surveyed include:

• Availability of construction credit
• Construction costs rising faster than home values
• Restrictive mortgage lending rules impacting would-be home buyers

Supply chains for building materials and available developed lots are also impacting home builder confidence, as they have been lagging behind increasing demand for homes since the recession and will need more time to catch up.

Six Month Confidence Forecast Strongest Since February 2007

While builder confidence fell on a month-to-month basis, home builders have a more positive outlook for the next six months.

The builder confidence reading for the next six months came in at 53 for April, which is the highest reading since February 2007.

In terms of demand for newly built homes, the home builders surveyed said that a shortage of existing homes, low mortgage rates and increasing consumer confidence are expected to improve the market for existing homes.

Consumer confidence is important to all facets of the home building and mortgage lending industries.

Buying a home is typically the largest investment that consumers make, and their confidence in the economy plays a role in their decisions about when or if they buy a home.

Regional readings for housing markets are based on a three month rolling average.

Results for April were unchanged or lower in all four regions as compared to the rolling average reported in March:

• Northeast: The reading of 38 is unchanged from March.
• Midwest: The reading declined by two points to 45.
• South: April's reading declined by four points to 42
• West: April's reading declined by three points to 55, but remains in positive territory.

Regional readings reflect conditions impacting only a specific area of the U.S.

Recent examples include the impact of Hurricane Sandy in the Northeast, and an ongoing lack of land available for home construction in the West.

NAHB Housing Market Index Shows Builder Confidence Slip In March

The National Association of Home Builders (NAHB) released its NAHB/Wells Fargo Housing Market Index for March on Monday.

The HMI measures builder confidence in the market for newly constructed single family homes.

A reading of 50 for the NAHB Housing Market Index (HMI) indicates that more builders are confident of housing market conditions for new single family homes than those who are not confident.

Home builder confidence fell for the third consecutive month with a two-point drop to a reading of 44 in March.

Several Factors Create New Home Bottleneck

An NAHB leader noted that several situations are causing a “bottleneck” in the supply of new homes as compared to those wanting to buy them:

• Low supply of developed lots available for new construction

• Rising costs for labor and materials

• Stricter mortgage credit requirements for homebuyers and lowball home appraisals. (These circumstances are typically caused by some mortgage lenders taking a conservative attitude toward risk management by tightening credit requirements and appraisers erring on the side of caution when valuing single family homes.)

Would-be buyers may find themselves stuck between a lack of buildable lots and ready building supply chains and lenders reluctant to risk mortgage defaults caused by lenient loan approvals.

Keep in mind that this only one perspective; if you're looking for a new home, don't give up.

Future Sales Confidence Creates Bright Spot

The HMI also measures builder confidence in three categories including current sales conditions, sales conditions within the next six months and the amount of foot traffic in new housing developments.

Confidence in current sales conditions dropped from 51 points in February to 47 points in March, but the news is not all bad.

Confidence in sale conditions for the next six months rose by one point from 50 to 51, and builder confidence in buyer foot traffic rose by three points to 35.

Foot traffic will likely increase as warmer weather arrives and the peak home buying season gains momentum.

Housing Market Conditions Vary By Region And Community

The three-month rolling average of builder confidence in four geographic regions of the U.S. showed mixed results for March.

The index reading for the Northeast had no change and remained at 39.

Index readings for the Midwest and Southeast declined by one point each to 47 and 46 respectively.

The March index reading for the West came in gaining four points to 58.

If you're ready to buy a home, check with a licensed real estate professional specializing in the area where you want to buy.

This is the best way to gain specific information on the Alpharetta area's market conditions and home prices.

Strong Builder Confidence May Signal Good Time To Buy New Homes

Many times real estate market experts point to the feelings of the nation's home builders as a bell-weather signalling the health of the housing sector.

This month's reading indicates that home builders are feeling pretty good.

The National Association of Home Builders / Wells Fargo Housing Market Index (HMI) for February changed by one point to 46 as compared to 47 for January's reading. 

Over the last four months, HMI readings have stayed within a three-point range between 45 and 47, indicating a plateau after rising from 25 to 45 in 2012.

Housing Market Index Near Highest Levels Since 2006

The good news is that February's reading remains near the HMI's highest level since April 2006, when the HMI reading reached 51.

Some builders may be taking a wait-and-see stance in their confidence as high national unemployment rates and rising costs for building materials impact home buying ability and home prices.

Regional factors influencing builder confidence include difficulties in finding building sites and labor required for building new homes.

3 Important Categories Affect The Home Builders Index

The HMI is a seasonally-adjusted index comprised of three survey categories of home builder confidence.

Readings above 50 indicate that more builders are finding conditions good than bad within each category and overall:

• Builder confidence in current new single-family home sales fell by one point to 51 in February, but sustained a positive rating.

• Builder confidence in new single-family home sales over the next six months achieved a reading of 50 in February, up from 49 in January.

• Builder confidence in foot-traffic in new single-family homes fell by four points from 36 in January to 32 in February.

February results for four regional categories consist of 3-month moving averages for new home sales: the Northeast gained 3 points to 39, The West gained 4 points to 55, the Midwest fell 2 points to 48 and the South fell by 2 points to 47.

With demand for homes increasing, home prices and mortgage rates are likely to rise during spring and summer as warmer weather brings out more potential buyers.

Check with your real estate and mortgage professional for the most updated market details in your area. 

Over 70% Of US Metro Market Housing Markets Improve In February

The National Association of Homebuilders recently released its Improving Markets Index for the month of February.

The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating "measurable and sustained growth".

259 U.S. markets are qualified as "improving" this month, a 17-market jump from the month prior and includes participants from all 50 states as well as the District of Columbia.

Experts point to improving market conditions in at least one market in all 50 states as a strong indication that the housing recovery is gaining substantial momentum.

This increasing momentum may suggest that now may be a very good time to purchase a home.

Compared to September 2011, when there were just 12 improving metro market areas, the widespread positive movement indicates how conditions are steadily improving nationwide.

So what qualifies a market as "improving"? The NAHB uses strict criteria.

First, the group gathers data from the three separate, independent sources :

1. Employment growth from the Bureau of Labor Statistics
2. Housing price appreciation from Freddie Mac
3. Single-family housing permits growth from the U.S. Census Bureau.

Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.

And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for which the most recent "bottom" is at least six months in the past.

In this way, the Improving Market Index doesn't just measure housing market strength -- it measures general economic strength.

Of the 22 markets added to the Improving Market Index in November, the following cities were included : Chico, California; Columbus, Georgia; Fort Wayne, Indiana; Topeka, Kansas; and Wenatchee, Washington.

Several markets dropped off the list, too, including Champaign, Illinois; Lebanon, Pennsylvania; and Amarillo, Texas.

The complete list of 259 metropolitan areas on February's IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.

Homebuilder Confidence Nearly Triples In 2 Years

The National Association of Homebuilders (NAHB) Housing Market Index ended its 8-month winning streak this month, posting a value of 47. The January 2013 reading is on level with last month, and remains at a near 7-year high.

The Housing Market Index (HMI) is a measure of home builder confidence. 

HMI readings below 50 indicate a "poor" new construction conditions for single-family homes nationwide; ratings above 50 signal "good" ones.

Not since April 2006 has the Housing Market Index crossed into "good" territory, but the past two years have witnessed the HMI nearly triple; and the index is up from a reading of 25 just twelve months ago.

Values would have likely increased this month, too, if not for builder uncertainty. The NAHB cites concern over prolonged legislative decisions as contributing factors to this month's builder confidence reading. Specifically, the trade group expressed concern over the future of the federal income tax deduction for home mortgage interest and spending cuts related to the recent, so-called "fiscal cliff".

As compared to the month prior, this month's HMI showed the following :

• Current housing conditions were mostly unchanged between December and January
• Sales expectations the next six months dropped slightly between December and January
• Prospective home buyer foot traffic increased slightly between December and January

January marks the tenth consecutive month through which buyer foot traffic has increased. Foot traffic is now at its highest level in nearly 7 years.

The NAHB Housing Market Index suggests a slow, steady rise in confidence among the nation's home builders. This is occurring, in part, because of improving housing market conditions both nationally and regionally. Another factor is rising confidence among today's home buyers.

Home sale prices Atlanta remain relatively low and mortgage rates sit below 4 percent. With demand for homes growing, prices are expected to rise. Home buyers this season may be more likely to get a good "deal" than the buyers of spring or summer.

Homebuilder Confidence Rises For 9th Straight Month

The National Association of Home Builders (NAHB) released its Housing Market Index (HMI), showing another monthly gain -- its ninth in a row.

The HMI -- a gauge of homebuilder confidence -- rose 1 point to 47 in December 2012, lifting the index to its highest levels since April 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal "good" conditions. Coincidentally, the last time that the HMI read above 50 was April 2006, too.

The Housing Market Index is based on a survey which the NAHB sends to its members. The survey asks the nation's builders to rate the current housing market conditions.

In December, home builders reported gains in two of the three areas surveyed:

• Current Single-Family Sales: 51 (+2 from November 2012)
• Projected Single-Family Sales: 51 (-1 from November 2012)
• Buyer Foot Traffic: 36 (+1 from November 2012)

It's noteworthy that buyer foot traffic has climbed over nine straight months and is now at it's highest reported level in nearly 7 years. Low mortgage rates and rising home prices throughout Alpharetta have compelled today's renters and existing homeowners to consider their home buying options.

This was none more apparent that in the Northeast Region in which builder confidence grew twelve points to 42. The Midwest Region also showed a strong improvement, climbing 2 points to 53. The West and South regions fell slightly between November and December.

For today's buyers, rising builder confidence may be a signal that home prices are headed higher. Confident home sellers -- including the nation's builders -- are less likely to make price concessions into an improving market, or may be less likely to offer free upgrades to buyers.

Therefore, if you are in the market for a newly-built home, consider that you may get the best "deal" by acting sooner rather than later. Mortgage rates are rising and home prices are, too. Six months from now, your costs of homeownership may be higher.

Improving Market Index : Up To 201 Cities For December 2012

Last week's National Association of Home Builders/First American Improving Markets Index (IMI) brought positive news about U.S. housing markets and the broader U.S. economy, in general.

According to the IMI, there are now 201 U.S. markets which can be considered "improving".

To meet this standard, a local area economy must exhibit at least six consecutive months of improvement in terms of local employment, single-family housing permits and area home prices; and, at least six months must have passed since each of these readings were at their respective low points, called troughs.

The Improving Market Index added 76 metropolitan areas in December as compared to the month prior. 45 states are now represented on the list, in addition to the District of Columbia.

The cities deemed "improving" aren't limited to recent, high-profile hot spots such as Detroit, Michigan; and Phoenix, Arizona, either. Several of the newly-included areas for December were :

• Atlanta, Georgia
• Bloomfield, Illinois
• Ithaca, New York
• Riverside, California
• Seattle, Washington

The geographic diversity of this month's Improving Market Index suggests a nationwide economic recovery in progress. More jobs, a steady supply of available homes, plus rising home prices helps communities thrive.

Unfortunately, it may also mean less opportunity to buy homes as rock-bottom prices.

As sellers and home builders gain confidence in the economy, it may be more challenging for today's Alpharetta buyers to get a "great deal".  In addition, an improving, post-recession economy will likely lead mortgage rates higher, robbing home buyers of their purchasing power.

Freddie Mac says that the average 30-year fixed rate mortgage rate is 3.32% nationwide. In a fully-recovered economy, that rate could be 5 percent or higher. The impact on monthly housing payments would be palpable.

The National Association of Homebuilders expects more markets to join the Improving Market Index list through 2013. Today's home buyers may want to lock in today's low rates before economic improvement leads mortgage rates higher.

Homebuilder Confidence Spikes To 6-Year High

The National Association of Home Builders (NAHB) released its Housing Market Index (HMI) Tuesday, which showed sharp, 5-point increase to 46 for November 2012, marking the seventh consecutive monthly gain for the HMI, and lifting the index to its highest point since May 2006.

Readings under 50 indicate unfavorable housing conditions for builders. Readings over 50 signal "good" conditions. 

The Housing Market Index is a measure of builder confidence, published monthly, based on a survey sent to NAHB members which asks them to rate housing market conditions.

In November, home builders reported gains in two of the three areas surveyed:

• Current Single-Family Sales: 49 (+8 from October 2012)
• Projected Single-Family Sales: 53 (+2 from October 2012)
• Buyer Foot Traffic: 35 (unchanged from October 2012)

Builders report growing demand for new homes as inventories for alternative properties -- distressed and foreclosed homes, for example -- shrink nationwide.

Even Hurricane Sandy did little to suppress builder confidence.

The NAHB survey was conducted in the two weeks immediately following Hurricane Sandy so the Housing Market Index does reflect builder sentiment during that period. All regions of the country posted confidence gains in November.

The South Region showed a 4-point gain to 43; the West Region showed a 3-point gain to 47; the Midwest Region showed a 3-point gain to 45; and the Northeast Region showed a 2-point gain to 31.  

Despite the gains, builders in Alpharetta and nationwide still report challenges with home appraisals and tight credit conditions. In addition, a shortage of buildable lots in some areas is limiting the ability for home builders to put more single-family homes on the market.

As builder confidence grows, today's buyers throughout Georgia should prepare for the possibility of higher home prices. Confident sellers are less likely to make price concessions or to offer free upgrades.

If you are in the market for a new home, therefore, the time between now and the New Year may be the best opportunity to make a bid on a home. Starting next year, low prices may be gone.

Improving Market Index Swells To 125 In November

The U.S. economy continues to improve.

The National Association of Homebuilders released its Improving Markets Index Tuesday. The report attempts to identify U.S. metropolitan areas in which the economy is improving, demonstrating "measurable and sustained growth".

125 U.S. markets are qualified as "improving" this month, a 22-market jump from the month prior and and all-time high for the index which launched late last year.

Compared to November 2011, this month's IMI has climbed more than four-fold, rising from last year's reading of 30. This jump suggests that housing recovery is firmly taking root, helping to generate needed jobs and economic growth across much of the country.

So what qualifies a market as "improving"? The NAHB uses strict criteria.

First, the group gathers data from the three separate, independent sources :

1. Employment growth from the Bureau of Labor Statistics
2. Housing price appreciation from Freddie Mac
3. Single-family housing permits growth from the U.S. Census Bureau. 

Next, for each of the above data sets, the National Association of Homebuilders separates for local data in each U.S. major metropolitan area.

And, lastly, armed with data, the NAHB looks for areas in which growth has occurred for all three data points for six consecutive months; and for the most recent "bottom" is at least six months in the past.

In this way, the Improving Market Index doesn't just measure housing market strength -- it measures general economic strength. 

Of the 22 markets added to the Improving Market Index in November, the following cities were included : San Diego, California; Gainesville, Florida; Omaha, Nebraska; Louisville, Kentucky; and Charlotte, North Carolina.

Several markets dropped off the list, too, including Hanford, California; Orlando, Florida; Terre Haute, Indiana; and Greenville, North Carolina.

The complete list of 125 metropolitan areas on November's IMI, plus breakouts of the metropolitan areas newly added and dropped is available online at http://www.nahb.org/imi.

Homebuilder Confidence Rises Again; Tops 40

Home builder confidence continues to make new highs. 

As reported by the National Association of Home Builders, the Housing Market Index, a measure of builder confidence, rose to a reading of 40 in September -- its highest mark since June 2006.

The index is now higher through five straight months and 11 of the last 12.

For home buyers in Marietta , the survey may be signaling higher new home prices ahead; when builders are more confident in housing, they're may be less likely to make concessions in price, and to "sweeten" deals with free upgrades and/or subsidized mortgage rates.

The Housing Market Index is published monthly, based on responses to a 3-question survey that the NAHB sends to its members. The questions cover three distinct parts of a builder's business, each requiring a simple, one-word answer.

Builders are asked to respond with "Good", "Fair" or "Poor"; or, "High", "Average", "Low" to the following three comments :

• Rate market conditions for the sale of new homes today
• Rate market conditions for the sale of new homes 6 months from today
• Rate the foot traffic of prospective new home buyers

All three survey components showed an increase from August with buyer foot traffic rating at its highest point in more than 6 years. This is especially noteworthy because as the number of prospective buyers increases, so does competition for homes for sale.

There are currently just 142,000 new homes for sale nationwide, the stock of which will "sell out" in 4.6 months at the current pace of sales.

Not since October 2011 has the national home supply been above six months, the consensus dividing line between bull and bear market. Today's new construction market favors builders and builders know it.

If you're planning to buy new construction in Georgia later this year or into early-2013, consider moving up your time frame. Homes may be for sale, but they won't likely be as inexpensive as they are today.

Improving Market Index Climbs To 99

The number of U.S. housing markets showing "measurable and sustained growth" has increased by 19 this month, according to the National Association of Homebuilders' Improving Market Index.

The Improving Market Index is a monthly report meant to identify U.S. markets in which economic growth is occurring broadly -- not just in terms of home prices.

The IMI's conclusions are based on three separately-collected data series, each from a different division of the U.S. government and each tied to specific local economic conditions.

In this way, the Improving Market Index gives a better idea of which markets will outperform averages in the months and years ahead.

The three data series incorporated into the Improving Market Index are :

1. Employment Statistics (from the Bureau of Labor Statistics)
2. Home Price Growth (from Freddie Mac)
3. Single-Family Housing Growth (from the Census Bureau)

The National Association of Homebuilders evaluate the reports for each major metropolitan area and then deems a given one "improving" if two conditions are met. First, all three data series must indicate growth in the current month and, second, at least 6 months have passed since each of the data points' respective "bottoms".

The IMI ignore short-term spurts, in other words, and attempts to identify those areas showing long-term, sustainable growth. For relocating home buyers, "improving" cities may also offer better long-term employment and income opportunities. 

33 states are represented in the September Improving Market Index, as well as the District of Columbia. 31 new areas were added to the list as compared to August and just 12 dropped off.

The newly-added areas include Sacramento, California; Jacksonville, Florida; and Waco, Texas. Cities falling off the list for September include Dover, Delaware.

The complete Improving Markets Index is available for download at the NAHB website. For a better gauge of what's happening in Atlanta on a local level, however, talk to a local real estate agent.

Homebuilder Confidence Rises To 5-Year High

Home builder confidence rises again.

For August 2012, the National Association of Homebuilders reports the monthly Housing Market Index at 37 -- an increase of more than 100% from one year ago and the highest HMI value since February 2007.

The Housing Market Index is an indicator of homebuilder confidence and when it reads 50 or better, the HMI suggests favorable conditions for home builders. Readings below 50 suggest unfavorable conditions for builders.

Despite the recent rise in home builder attitudes, however, the Housing Market Index remains mired below 50 where it's been since April 2006.

For new construction home buyers in Canton , the HMI may offer insight into the market for new homes through the end of this year. This is because the NAHB Housing Market Index is a composite survey, meant to gauge builder sentiment in three specific areas -- current business, future business, and buyer activity.

When all three fronts are rising, it points to an improving market for sellers (i.e. home builders). Unfortunately, though, what's good for sellers can be damaging to buyers. Builders are less willing to make concessions on price or product when markets are getting stronger.

In August, home builders saw strength across all three categories :

• Current Single-Family Sales : 39 (+3 from July)
• Projected Single-Family Sales : 44 (+1 from July)
• Buyer Foot Traffic : 31 (+3 from July)

Especially noteworthy in the August HMI is that builders project more sales for the next six calendar months than they have projected at any time in the last 5 years. With mortgage rates at all-time lows and buyer foot traffic growing, it's no wonder confidence is high.

When demand for homes is strong amid stagnant or falling supplies, home prices rise and that's exactly what we're seeing in many U.S. markets. It's a good time to be a Georgia home buyer today, but market momentum appears to be shifting.

If you're in the market for a newly-built home, therefore, the best "deal" may be the one you get today. Next year, your costs may be higher. 

Home Affordability Sinks For The First Time In 12 Months

Rising home prices are taking a toll on today's home buyers. For the first time in 4 quarters -- and despite falling mortgage rates -- home affordability is sinking. 

Earlier this week, the National Association of Home Builders reported the Home Opportunity Index, a measure of home affordability, down to 73.8 for the second quarter of the year. This marks the metric's first "down" quarter since the second quarter of 2011, and is its lowest reading since December 2010.

A home is considered "affordable" when its payments meet standard mortgage underwriting criteria for families earning the local median income. This definition is used for homes across all U.S. markets -- including for homes in Canton.

73.8% of homes sold last quarter were affordable to households earning the national median income of $65,000. This is the 13th straight quarter dating back to 2009 that the index surpassed 70. Prior to 2009, the Home Opportunity Index had not crossed 70 even one time.

Like all real estate data, home affordability varied by locale.

In the Midwest, for example, affordability was highest. 7 of the top 10 most affordable markets nationwide were spread throughout the nation's heartland. An Alaskan city took the top spot.

The top 5 most affordable cities for home buyers in Q2 2012 were:

1. Fairbanks, AK (98.7%)
2. Mansfield, OH (98.1%)
3. Springfield, OH (95.9%)
4. Carson City, NV (95.4%)
5. Kokomo, IN (95.4%)

At #23, Ocala, Florida (91.7%) was the top-ranked South Region city last quarter.

By contrast, the Northeast Region and Southern California remained among the least affordable housing markets nationwide. Led by the New York-White Plains, NY-Wayne, NJ area, 9 of the 10 least affordable areas were in the Mid-Atlantic and California, and for the 17th consecutive quarter the New York metro area was ranked "Least Affordable".

Just 29.4 percent of homes were affordable to households earning the area's median income there, down from 31.5 percent three months ago.

The rankings for all 225 metro areas are available for download on the NAHB website.

Improving Market Index Spans 32 States, District Of Columbia

80 U.S. metropolitan markets are showing "measurable and sustained growth" this month, according to the National Association of Homebuilders' Improving Market Index.

It's good news for the economy and good news for housing. 

The NAHB's Improving Market Index is meant to identify U.S. markets in expansion. It's a composite of the three distinct data sets which, as a group, present a more holistic view of a given city's growth :

1. From the Bureau of Labor Statistics, the IMI tracks employment figures
2. From Freddie Mac, the IMI tracks home price data
3. From the Census Bureau, the IMI tracks single-family building permits

The home builder trade group compiles this data and, in order for a given metropolitan area to earn the label "improving", the area must meet two specific growth conditions.

First, in a given city, each of the above data sets must show growth or expansion in the current calendar month. If one of the three do not show growth, the city cannot qualify.

Second, in a given city, at least six months must have passed since the most recent trough of all of the above metrics.  It's this second clause that can make the Improving Market Index meaningful.

By focusing on long-term growth trends within a city, the IMI ignores "blips" and seasonal irregularities. 

The August IMI shows 80 improving markets nationwide, a 4-city decrease from July 2012. 5 new cities were added to the index including Miami, Florida; Terre Haute, Indiana; and Lubbock, Texas. Nine cities fell off the list.

Overall, 32 states are represented in the IMI, and the District of Columbia, too.

For today's Atlanta home buyers, the IMI doesn't provide much actionable information. It doesn't show home prices, for example, nor the current demand for homes. What it shows is the strength of local economies, though, and in many cases, as the economy heats up, so do home prices.

The complete Improving Markets Index is available for download at the NAHB website.

Homebuilder Confidence Doubles In 12 Months

Homebuilder confidence is soaring.

For the second time in three months, the National Association of Homebuilders reports that the Housing Market Index made sizable gains. 

The Housing Market Index measures homebuilder confidence in the new construction market and is scored between 1-100. Readings above 50 indicate favorable conditions in the single-family new home market. Readings below 50 indicate poor conditions.

The Housing Market Index leaped to 35 in July, a 6-point improvement and the index's biggest one-month gain since September 2002.

The HMI is now up 14 points this year and is more than double its value of one year ago.

The Housing Market Index itself is a composite of three separate survey questions sent to NAHB members monthly. The questions are basic :

1. How are market conditions for the sale of new homes today?
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

For July 2012, home builders reported huge gains. Current home sales are up 6 points; sales expectations for the next six months are up 11 points; and buyer foot traffic is up 6 points.

All three survey answers made 5-year highs. Not since 2007 has sales volume and foot traffic been as strong, and over the next 6 months, builders expect a blow-out finish to the year.

It's no surprise, either.

Low mortgage rates throughout Georgia have lowered monthly housing payments to levels below monthly rent for a comparable home. Plus, programs such as the FHA 3.5% downpayment program continue to help first-time buyers get in homes.

There is a downside to rising homebuilder confidence, however. When builders feel more comfortable about their business and the prospects for the future, they're less likely to make sales concessions to to offer free upgrades. If you're shopping for new construction, therefore, consider moving up your time frame.

Home affordability remains historically high today. It may not be so tomorrow.

84 U.S. Markets Improving In July

Where economic growth goes, housing growth often follows.

That's why it's good news for homeowners that 84 U.S. metropolitan areas are showing "measurable and sustained growth" this month, according to the National Association of Homebuilders' Improving Market Index.

The Improving Market Index is a derivative report, based on the results of three separate data series which examine a city's local economy.

The data series used in the IMI are :

1. Employment data from the Bureau of Labor Statistics
2. Home price data from Freddie Mac
3. One-unit building permits from the Census Bureau

The NAHB compiles this data monthly, assigning a given metropolitan area the label "improving" if the following two conditions are met. First, all three data series above must show growth or expansion in the current month.

Second, at least six months must have passed since any of the above that area's most recent economic "bottom".

Because of this second clause, the IMI is focused on long-term trends in city growth, singling out only those markets in which sustained economic growth is occurring. The six-month requirement causes "blips" of growth remain ignored, and uncounted. 

The July IMI showed 84 improving markets nationwide, a 4-city increase over June 2012. 11 new cities were added to the index including Jackson, Michigan; Springfield, Massachusetts; and, Houston, Texas. Seven cities fell off the list.

32 states are represented in this month's IMI, and the District of Columbia, too.

For Georgia home buyers, there isn't much actionable information in the Improving Market Index. We don't see how many homes were sold in the month prior, for example. Nor do we see how quickly homes are selling in a particular ZIP code. But what the IMI can provide is a broad look at whether a local economy has found its footing. 

When economies are strong, it can create competition for homes which can drive up home sales prices. 

The complete Improving Markets Index is available for download at the NAHB website. But, for a better feel of what's happening in Canton on a local level, talk to a real estate agent.

Building Confidence Rises To 5-Year High

Home builders anticipate growth in the market for newly-built, single-family homes.  

For June 2012, the National Association of Homebuilders reports its monthly Housing Market Index at 29 -- an increase of more than 100% from one year ago and the highest HMI value since May 2007.

When the Housing Market Index reads 50 or better, it's meant to indicate favorable conditions for builders in the single-family, new-construction market. Readings below 50 suggest unfavorable conditions for builders.

The index has not been above 50 since April 2006. 

The NAHB Housing Market Index is not a "single survey" -- it's a composite. Three separate surveys are sent by the trade association to its members and roughly 400 builders respond. The NAHB's survey questions query builders on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current levels of buyer "foot traffic".

The results are then compiled into the NAHB Housing Market Index.

In June, home builders provided mixed replies :

• Current Single-Family Sales : 32 (+2 from May)
• Projected Single-Family Sales : 34 (Unchanged from May)
• Buyer Foot Traffic : 23 (Unchanged from May)

Of particular interest to today's new construction buyers is that builders are reporting higher levels of single-family sales, and expect their sales volume to increase over the next six months. This expectation is rooted in housing market momentum and low mortgage rates.

Never in recorded history have homes been as affordable as they are today and home buyers are taking notice. Foot traffic through builder models remains strong and is at its highest pace in more than 5 years. 

When demand for homes outweighs the supply of homes, home prices rise. If builder expectations are met, therefore, buyers in Atlanta should expect new home prices to rise in 2012's second half.

Planning to buy new construction this year or next? Consider moving up your time frame.

31 States Represented In June's Improving Market Index

The number of U.S. housing markets showing "measurable and sustained growth" slipped by 20 in June, according to the National Association of Homebuilders.

The Improving Market Index is meant to identify housing markets in which economic growth is occurring as a whole -- not just in the real estate space.

By using three separate, independently-collected data series, each tied to local economic conditions, the Improving Market Index takes a broader view of the housing market than other housing market indicators -- the Case-Shiller Index, for example -- which are often singularly tied to housing contracts.

The Improving Market Index tracks three distinct data series :

1. From the Bureau of Labor Statistics : Employment statistics
2. From Freddie Mac : Home price growth
3. From the Census Bureau : Single-family housing growth

A given metropolitan area is categorized as "improving" by the National Association of Homebuilders if all three data series indicate growth at least six months after that area's most recent economic trough.

In other words, the Improving Market Index looks past head-fakes of recovery, instead in search of long-term, sustainable growth.

This is one reason why its list of included cities is so fluid. It's difficult for a metropolitan area to meet the Improving Market Index's inclusion requirements month-after-month in a post-recession economy.

The Improving Market Index dropped to 80 in June, says the home builder trade group.

The list includes 28 new entrants, with forty-eight markets removed as compared to May. 31 states are represented nationwide.

For home buyers in Georgia , the Improving Markets Index is a non-actionable report but it does do a good job of highlighting the local nature of real estate. For example, Columbus, Indiana was added as an Improving Market in June. Yet, Indianapolis, Indiana -- located just 46 miles away -- was downgraded from the same list. 

Economies vary by locale.

The complete Improving Markets Index is available for download at the NAHB website. For a better gauge of what's happening on the local level in Canton , though, talk to a local real estate agent.

Home Affordability Reaches New High In Q1 2012

Falling mortgage rates and stagnant home prices are making a positive effect on home affordability nationwide. Never before in recorded history have so many homes been affordable to households earning a moderate annual income.

Last week, the National Association of Home Builders reported the Home Opportunity Index at 77.5 -- it's highest reading of all-time. The index indicates that more than 3 of every 4 homes sold last quarter were affordable to households earning the national median income of $65,000.

Last quarter marks the 12th straight quarter -- dating back to 2009 -- in which the index surpassed 70. Prior to this run, the index had never crossed 70 even once.

That said, like most real estate statistics, the Home Affordability Index has a national purview. National data is of little value to homeowners in specific cities such as Canton , or in specific neighborhoods such as BrookStone.

Last quarter, home affordability varied by region.

In the Midwest, for example, affordability was highest. 7 of the top 10 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. The top two spots, however, went to an East Region town (Cumberland) and a Pacific Northwest Region city (Fairbanks, Alaska), respectively.

The top 5 most affordable cities for home buyers in Q1 2012 were:

1. Cumberland, MD (99.0%)
2. Fairbanks, AK (98.9%)
3. Wheeling, WV (97.0%)
4. Kokomo, IN (95.8%)
5. Indianapolis, IN (95.8%)

At #17, the Lakeland/Winter Haven, Florida area was the top-ranked South Region city last quarter.

By contrast, the Northeast Region and Southern California ranked among the least affordable housing markets -- again. Led by the New York-White Plains, NY-Wayne, NJ area, 8 of the 10 least affordable areas were in the Mid-Atlantic and California, and for the 16th consecutive quarter the New York metro area was ranked "Least Affordable".

Just 31.5 percent of homes were affordable to households earning the area median income there, up from 25.2 percent six months ago.

The rankings for all 225 metro areas are available for download on the NAHB website.

Homebuilder Confidence Moves To 5-Year High

Homebuilder Confidence is on the rise once again.

After a brief dip in April, the National Association of Homebuilders reports that the Housing Market Index rose 5 points in May to 29. The increase marks the sharpest climb in homebuilder confidence on a month-to-month basis in 10 years, and raises the index to a 5-year high.

The Housing Market Index is scored from 1-100. Readings above 50 indicate favorable conditions in the single-family new home market overall. Readings below 50 indicate poor conditions.

The HMI has not been above 50 since April 2006.

The Housing Market Index itself is a composite reading as opposed to a straight-up homebuilder survey. The published HMI figure is a compilation of the results of three specific questionnaires sent to NAHB members monthly.

The survey questions are basic :

1. How are market conditions for the sale of new homes today?
2. How are market conditions for the sale of new homes in 6 months?
3. How is prospective buyer foot traffic?

This month, builders are reporting strong improvement across all three surveyed areas. Current home sales are up 5 points; sales expectations for the next six months are up 3 points; and buyer foot traffic is up 5 points to its highest point since 2007.

With mortgage rates low and home prices suppressed, the market for new homes is gaining momentum, a conclusion supported by the New Home Sales report which shows rising sales volume and a shrinking new home inventory nationwide.

The basics of supply-and-demand portend higher new home prices later this year -- a potentially bad development for buyers of new homes in Georgia and nationwide. With demand for new homes rising, builders may be less likely to make sale price concessions or to offer "upgrade packages" to buyers of new homes.

If you're shopping for new construction in or around Atlanta , therefore, consider moving up your time frame. Home affordability is high today. It may not be tomorrow.