In the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released last week, homebuilder confidence in the market for newly-built single-family homes jumped six points to a level of 71, the highest it has been since June 2005.
According to Eye On Housing, one of the reasons for the increased confidence is that builders have started to realize benefits from President Trump’s actions on regulatory reform, specifically his recent executive order to rescind or revise the “waters of the U.S.” (WOTUS) rule that affects permitting.
The rule extended the areas in which homebuilders are required to get permits, often interfering with state and local regulatory authority. Recently, two courts have issued a temporary halt.
“NAHB commends President Trump for listening to our serious concerns about the flawed WOTUS rule that goes so far as to regulate man-made ditches and isolated ponds on private property,” said NAHB President Granger MacDonald at the signing ceremony for the executive order in February.
“This is an important first step towards fixing the flawed regulation and working towards a more sensible WOTUS rulemaking.”
In the index, all three HMI components showed sold gains in March, with current sales conditions increasing seven points to 78, sales expectations over the next six months rising five points to 78m and buyer traffic jumping eight points to 54.
While the numbers are positive, they do come with some guidance.
“While builders are clearly confident, we expect some moderation in the index moving forward. Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor,” the NAHB said in a statement.
“The HMI also benefited from unseasonably warm weather at the start of 2017, improving both demand and construction conditions.”
The Housing Market Index from NAHB is derived from a monthly survey which has been conducted for 30 years, and gauges builder perceptions of current single-family home sales and sales expectations for the next six months.
The survey also asks builders to rate traffic of prospective buyers, and scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good, as opposed to poor.
“Sentiment” Versus Production
While the report from the NAHB reflects the sentiment of homebuilders, the most recent manufactured home production report from MHARR shows an actual production increase of 33.5 percent in January.
As Daily Business News readers are already aware, manufactured housing continues to offer one of the most practical and affordable solutions to providing a chance at the American dream for those who wish to own a home.
The titans of business recognize the opportunity as well, as giants and independents alike are actually “doubling down” on the industry.
ELS Chairman Sam Zell has been famously quoted as correcting misconceptions about the industry, saying during this interview, “Everyone calls them trailer parks. Pencil head, it’s not a trailer park.“
For more on manufactured housing being the solution that’s hiding in plain sight, see MHProNews and MHLivingNews Publisher L.A. “Tony” Kovach’s insight into the opportunity linked here. ##
(Image credits are as shown above.)
Submitted by RC Williams to the Daily Business News for MHProNews
