Summary: Builder confidence is often a good indicator of the state of the housing market and when prospective buyers should make a move. Is now a good time for you to buy in Washington State?
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.
Last month’s reading indicates that home builders are feeling pretty good.
The National Association of Home Builders / Wells Fargo Housing Market Index (HMI) for September changed by one point to 68 as compared to 67 for August’s reading.
Over the last four months, HMI readings have stayed in the mid-to upper 60s, and the last reading is the highest since October 2018.
Housing Market Index Near Highest Levels in a Year
Continued housing demand and ongoing low interest rates continue to stimulate builder confidence, despite ongoing supply challenges that have played a role in housing affordability.
Having said that, builders are still somewhat concerned about the uncertainty surrounding the trade dispute with China.
The good news is that September’s reading remains near the HMI’s highest level since October 201..
Some builders may be taking a wait-and-see stance in their confidence as 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:
- The HMI index measuring current sales conditions increased two points to 75.
- The measuring of prospective buyers remained unchanged at 50.
- The measuring of sales expectations over the next six months dipped one point to 70.
- The Northeast realized an increase of two points to 59, the West also increased two points to 75, the South increased one point to 70, and the Midwest remained unchanged at 57.
With demand for homes increasing, home prices are likely to increase over the remainder of the fall and into the winter, especially with the current housing market in Washington State being hot right now. And with mortgage rates on a downward trend and expected to continue on this path, more and more potential buyers are likely to come out of the woodworks.
Check with your real estate and mortgage professional for the most updated market details in your area.
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Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.