The National Association of Home Builders’ housing market index rose three points to 40 in September, making it the fifth consecutive month of growth. This is promising news for the housing industry, Austin custom home builders, and the national economy as well.
NAHB Chairman Barry Rutenberg says this display of “improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there’s still a long way to go on the road to recovery,…in particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work.”
Each of the three components that make up the HMI increased in September. The component that gauges current sales conditions rose to 42, up four points from August. The component that gauges sales prospects over the next six months posted an eight point gain to 51 points. The component which measures traffic of prospective buyers increased by one point to 31. Throughout all regions of the nation, builder confidence has risen this month.
Not only is builder confidence on the rise, but the number of homes listed for sale is falling. We have begun to notice this change with the inventory of Austin luxury homes, too. When inventories fall, demand for new homes increases. This demand for new homes causes the price of materials and labor to go up, too. In August, inventories fell 18.7% year over year, and 34.1% from two years ago. Inventories decreasing and demand increasing puts more crews to work as new projects begin. This is very promising news as the national economy has a tendency to echo the housing market.