First Months of the Year Saw a Rise in Home Builder Confidence | Topouzis & Associates, P.C.


May 21, 2019

First Months of the Year Saw a Rise in Home Builder Confidence

First Months of the Year Saw a Rise in Home Builder Confidence

On this blog and elsewhere you may have read about the decrease in home construction during the latter portion of 2018.

Well, it’s making a comeback.

The National Association of Home Builders’ February Housing Market Index, which measures the confidence of the home construction industry—particularly single-family housing—showed a 4 point jump from the previous month, bringing it to 62. This was the second month in a row that confidence rose.

Concerns presented by the tariff threats in the latter part of last year put a dent in the confidence of builders for a brief period, and does continue to affect the affordability of raw materials, but there are counter-winds: a strong jobs market means more buyers, and low interest rates mean more inclination for those buyers to get into new housing.

And according to a construction report by the Census Bureau, construction spending itself rose 2.5 percent in January, and then again by another 1 percent in February. This was the third month in a row that such spending rose, against predictions made by many economists.

Indeed, an analysis at MarketWatch opines that perhaps the housing market slowdown during late 2018 was more of a pause than a cyclical end-marker. This is supported by a jump in January of mortgage applications for purchase of new homes by 43 percent over just one month previous, which is the highest number of such applications since 2013.

Some see this moment, with its low rates and strong economy, as a golden moment for construction. The key may well be whether construction companies make affordable housing rather than focusing on higher-end homes. There is little question that the starter-housing and rental markets remain areas of high pressure in the housing market, and for real estate investors this may well mark a zone of potential inroads into both profits and social responsibility.

Here at Topouzis & Associates, P.C., we do extensive title search work and perform curative services on every form of residential property, new or older-build, so that a buyer or investor knows they are getting into a home with clear title. Contact us if you have any questions or if you would like our considerable experience in dealing with the particularities of the real estate system.