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Home > Real Estate > CHART OF THE DAY: Home builder optimism reaches record high

CHART OF THE DAY: Home builder optimism reaches record high

Aug. 18, 2020 by Scott Helberg

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Many industries are still recuperating from the impact of the pandemic, but housing has been fortunate to experience a V-shaped recovery. Not only has the Housing Market Index from the National Association of Home Builders recovered to pre-pandemic levels, it has now matched December 1998 for an all-time high in the index’s 35-year history.

All three index components—current sales conditions, future sales conditions, and prospective buyer traffic—increased, with buyer traffic reaching its highest point. This coincides with the Tuesday release of July housing starts, which jumped to 22.6%, exceeding expectations, and nearly reaching the 1.5 million homes needed to fulfill the shortage in supply. Near record-low interest rates and an influx of potential new homebuyers seeking more space are among the factors fueling optimism. As job losses have tended to focus on the renter market, home affordability has remained favorable. Additionally, the supply of existing homes for sale has remained depressed and continues to fall short of necessary housing demand. On the downside, lumber prices have exploded in recent months and may dampen housing momentum later this year.

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Filed Under: Real Estate Tagged With: homebuilders, housing, Scott Helberg

About Scott Helberg

@ScottHelberg

Scott Helberg is a senior tax advisor in RSM’s Chicago-based national real estate industry practice focusing on consulting and compliance for a variety of real estate entities. In May 2019, he was selected for the firm's cutting-edge Industry Eminence Program, which positions senior analysts to understand, forecast and communicate economic, business and technology trends shaping the industries the firm serves.

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