Home builder confidence in Single Family Homes continues to improve.
In March, for the second consecutive month, the National Association of Homebuilders reports the Housing Market Index at 28 — a doubling of the reading from just 6 months ago and, along with last month, the highest HMI value since June 2007.
A home builder confidence number of 50 or better, reflects favorable builder conditions in the new home market. Readings below 50 suggest poor builder conditions.
The HMI itself is a composite reading. It’s the result of three separate surveys sent to home builders by the trade association. The NAHB asks builders to report on their current single-family home sales volume; their projected single-family home sales volume for the next 6 months; and, their current buyer “foot traffic”.
Approximately 400 surveys are returned each month. The results are compiled into the NAHB Housing Market Index.
In March, home builders provided mixed replies to the survey questions :
- Current Single-Family Sales : 29 (-1 from February)
- Projected Single-Family Sales : 36 (+2 from February)
- Buyer Foot Traffic : 22 (Unchanged from February)
It’s noteworthy, despite slowing sales in March, that home builders expect a surge in new home sales over the next 6 months. There are many reasons for this and home buyers should take note. We are already seeing in the past couple of months reasonably priced homes moving quickly often receiving multiple bids in Seattle, Bellevue and the surrounding areas.
First, the jobs market is showing signs of improvement. The U.S. economy has added more than 1 net new million jobs over the last 6 months and that is increasing the pool of potential home buyers in Washington and nationwide.
Second, the housing market is showing general signs of improvement. Home sales are brisk in many U.S. markets and home supplies are dropping. The glut of inventory we have seen in Seattle and the Eastside has moved lower in the past several months. This could put pressure home prices higher.
And, third, low Seattle mortgage rates have helped pushed home affordability to all-time highs. More home buyers earning the national median income can afford a median-priced home than at any time in history.
It’s all culminated in a monthly Buyer Foot Traffic reading which, at 22, is nearly triple the foot traffic reading from just three years ago. Washington and Oregon homebuyers are beginning to show signs of life and are starting to take advantage of today’s buyer-friendly market.
This spring may be a perfect buying opportunity as mortgage interest rates have started to increase, but still remain historically low and pent up selling demand may hit the market as sellers note that the market is starting to shift. If you know where you want to live for the next several years and secure your home with a 30 year fixed, as Warren Buffett stated recently purchasing a Single Family Home at current levels is a better investment than stocks and a great hedge against the US dollar and inflation.
For a free pre-approval visit www.sammamishmortgage.com or call 425-401-8787 to speak with one of our experienced loan professionals in our Bellevue office.