The new home market is particularly important to the health of the overall housing market. That’s because any improvement in the number of new homes being built helps inventory levels, which also helps moderate prices and balance supply and demand. Currently, buyer demand is high and the number of homes available for sale is low. So now is a good time to keep an eye on what’s happening in the market for newly built homes.
One good indicator of where the market stands is the National Association of Home Builders Housing Market Index. The survey asks builders for their perspective on current sales levels, buyer traffic, and the outlook for the next six months. The results are scored so that any number above 50 indicates more builders view conditions as good than poor. In June, the index rose two points to 60 – the highest reading since January.
Robert Dietz, NAHB’s chief economist, says there are a number of indications that the housing market will improve during the second half of this year. “Rising home sales, an improving economy, and the fact that the HMI gauge measuring future sales expectations is running at an eight-month high are all positive factors indicating that the housing market should continue to move forward in the second half of 2016,” Dietz said. More here.