More good news for the Central Florida real estate market as the National Association of Home Builders reported homebuilder sentiment rose to 47 in April, from 46 in March.
Although this is a very modest increase, it is an indicator that builders are expecting sales to continue to increase in the months ahead as the spring home buying season gets into full swing.
This is further supported by the Commerce Department's report that new home construction starts rose 2.8% in March to an annualized rate of 946,000.
Central Florida is poised for continued growth and as we see more new construction coming out of the ground it is a good sign for increasing home prices and economic stability in the region.
This press release originally appeared on the National Association of Home Builders' Newsroom on April 15, 2014 here.
BUILDER CONFIDENCE HOLDS STEADY IN APRIL
April 15, 2014 - Builder confidence in the market for newly built, single-family homes rose one point to 47 in April from a downwardly revised March reading of 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today.
“Builder confidence has been in a holding pattern the past three months,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del. “Looking ahead, as the spring home buying season gets into full swing and demand increases, builders are expecting sales prospects to improve in the months ahead.”
“Job growth is proceeding at a solid pace, mortgage interest rates remain historically low and home prices are affordable,” said NAHB Chief Economist David Crowe. “While these factors point to a gradual improvement in housing demand, headwinds that are holding up a more robust recovery include ongoing tight credit conditions for home buyers and the fact that builders in many markets are facing a limited availability of lots and labor.”
Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
The HMI index gauging current sales conditions in April held steady at 51 while the component gauging traffic of prospective buyers was also unchanged at 32. The component measuring expectations for future sales rose four points to 57.
The HMI three-month moving average was down in all four regions. The West fell nine points to 51 and the Midwest posted a four-point decline to 49 while the Northeast and South each dropped two points to 33 and 47, respectively.
Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the product of NAHB Economics, and is not seen or influenced by any outside party prior to being released to the public. HMI tables can be found at nahb.org/hmi. More information on housing statistics is also available at housingeconomics.com.
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So what does this mean for Orlando and Central Florida as a whole? Home sales usually increase in Spring every year for numerous reasons, one of which belongs to those who use their tax return toward their new home owning dreams (see our blog post on that here), and by increasing the score of confidence, builders can continue to increase inventory in single family homes and have faith that the sales numbers will improve.