By Jann Swanson | Mortgage News Daily
Home builders ended the year with an apparent outbreak of euphoria. Responding to higher trending sales and low interest rates they sent the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) soaring to its highest reading since June 1999. NAHB said the December HMI, a measure of builder confidence in the market for new homes, jumped 5 points to 76. The gain was on top of a November index that was revised up from 70 to 71.
“Builders are continuing to see the housing rebound that began in the spring, supported by a low supply of existing homes, low mortgage rates and a strong labor market,” said NAHB Chairman Greg Ugalde.
“While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still underbuilding due to supply-side constraints like labor and land availability,” said NAHB Chief Economist Robert Dietz. “Higher development costs are hurting affordability and dampening more robust construction growth.”
