The National Association of Home Builders keeps a monthly measure of how confident home builders are in the market for newly built single-family homes. The NAHB’s Housing Market Index is considered a good indicator of market health because home builders know the market. They have to if they want to be successful. Builders must accurately predict what buyers want, where they want it, and when. The NAHB surveys builders each month and bases its index on their answers, which are scored on a scale where any number above 50 indicates more builders consider conditions good than poor. In June, the index fell two points to 35. Robert Dietz, NAHB’s chief economist, says regulatory barriers are holding builders back. “Costly and inefficient regulatory policy is clearly impeding the ability of builders to increase the housing supply,” Dietz said. But where builders may be impeded, buyers could benefit. According to the index, more builders are reporting cutting prices and offering sales incentives, which could be good for summer shoppers. (source)
