Homebuilder Confidence at 10-Year High
Housing Market Index Continues Upward Climb
The National Association of Home Builders' Housing Market Index increased one point to 62 in September, an indication that residential construction companies are optimistic about the current and near-term trends of the overall housing market.
Residential construction companies are confident about the current housing market and its prospects in the not-too-distant future.
So much so that the Housing Market Index of the National Association of Home Builders is now at its highest level in 10 years. The HMI increased by one point in September to a reading of 62.
"The HMI shows that single-family housing is making solid progress, " Tom Woods, NAHB chairman, said. "However, our members continue to tell us that they are concerned about the availability of lots and labor. "
Each HMI is derived from a monthly survey that the NAHB has been conducting for 30 years. Builders are asked to assess current single-family home sales and traffic of prospective buyers, along with sales expectations for the next six months.
The index measuring buyer traffic increased two points to 47, and the metric about current sales conditions rose one point to 67. Sales expectations in the next six months dropped from 70 to 68. But it had been at 70 for two straight months, and the last time it was that high was in 2005.
In regional three-month moving averages, the West and Midwest each rose one point to 64 and 59, respectively. The South gained one point to 64, while the Northeast fell one point to 46.
"NAHB is projecting about 1.1 million total housing starts this year, " David Crowe, chief economist for the housing organization, said. "Today's report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year. "
Scores for each component are then used to calculate a seasonally adjusted index. Any number over 50 indicates that more builders view conditions as good than poor.
Construction Industry Job-Loss Trend Escalates
The number of major metropolitan areas in the nation losing construction workers is steadily rising, the Associated General Contractors of America reports.
For the year ending Aug. 31, 2015, employment in building trades declined in 153 metro regions, almost equal to the 163 areas that gained construction jobs.
Uncertainty about federal funding for construction programs and shortages of qualified construction workers are the root causes of these widespread declines, the AGC said.
"The fact that fewer than half of metro areas added construction jobs at a time when there were gains in nearly three-fourths of the states suggests that contractors in many more metros would be hiring if they could find qualified workers, " Ken Simonson, chief economist for the AGC, said.
The largest job losses for the yearlong period were in Fort Worth-Arlington, Texas, which shed 6,000 jobs or 8 percent. Houston-The Woodlands-Sugar Land, Texas, lost 3,700 jobs, or 2 percent, while Bergen-Hudson-Passaic, N.J., saw a drop of 1,900 jobs, or 6 percent.
Denver-Aurora-Lakewood, Colo., added 10,400 jobs, or an increase of 11 percent, to top all gainers. Seattle-Bellevue-Everett, Wash., grew by 8,700 jobs, or 11 percent, while Anaheim-Santa Ana-Irvine, Calif., increased by 7,500 jobs, or 9 percent.
AGC officials note that Congress has failed to pass a long-term surface transportation bill, and the uncertainty over this issue is hurting demand for contractors who work on projects funded by the federal government.
"Depending on the type of work they perform, contractors either can't find enough work for their people, or can't hire enough workers for their projects, " Stephen E. Sandherr, chief executive officer for the AGC, said. "Congress can help boost construction employment by passing measures to invest in aging infrastructure and supporting new investments in career and technical education programs to train future workers. "