This week, the National Association of Home Builders (NAHB) said that NAHB/Wells Fargo Housing Market Index (HMI) jumped 7 points to 71, reaching the highest level in 12 years since June 2005, which was pushed by President Trump's move to rescind the strict environmental rules.
“Builders are buoyed by President Trump's actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said Granger MacDonald, the Chairman of NAHB.
Numbers for the three component indices all increased. The component measuring current sales and the forward-looking index for the next six months were both at 78, which rose 7 points and 5 points from last month, respectively. The component measuring buyer traffic increased 8 points to 54. Since 2005, this was the third time that all component has been over 50.
In addition, the three-month moving averages in the Midwest rose 3 points to 68, and increased 1 points to 68 in the South. In the Northeast, the moving averages dropped 1 point to 48, and decreased 3 points to 76 in the West.
“While builders are clearly confident, we expect some moderation in the index moving forward,” said Robert Dietz, the NAHB’s Chief Economist. “Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.”
After the election, builder sentiment had moved higher, then at the start of the year, it receded influenced by rising mortgage rate and continued labor shortage.