As most housing market sites continue to release real estate records of a successful year of recovery in 2012, many economists predict 2013 to be another year of gains. Positive news regarding the housing market has likely helped boost consumer optimism, while the most recent National Association of Home Builders' Housing Market Index for January found builders remain confident.
While builder confidence in the market for newly constructed single-family homes matched the level of 47 seen in December, the strong hold over levels seen in early 2012 and previous years negatively affected by the housing market slump. NAHB notes this is the eighth consecutive month of growth in confidence, while December and January are the highest level seen since April 2006.
According to the organization, improvements to housing market factors, such as increased sales, have helped eliminate the inventory of both existing homes for sale and those that are delinquent. Less foreclosures and short sales have added to growth in home prices, while less existing properties paired with a demand for housing has boosted new home sales. The increase in business and demand for newly built homes should continue throughout much of 2013, which could result in even higher confidence in the new year.
"Conditions in the housing market look much better now than at the beginning of 2012 and an increasing number of housing markets are showing signs of recovery, which should bode well for future home sales later this year," said Barry Rutenberg, chairman of the NAHB. "However, uncertainties stemming from last month's fiscal cliff negotiations contributed to the pause in builder confidence and continuing discussions among policymakers related to spending cutes and the future of the mortgage interest deduction could put a damper on housing demand in coming months."
All regions nationwide post gains in builder optimism
Data from the index revealed both the Midwest and the Northeast saw a gain of two points, bringing the HMIs up to 50 and 36, respectively. The West saw the greatest gain resulting in having the highest HMI of 51, up 4 points from December figure. In the South, the index increased by 3 points to 49.
While housing markets continue to post gains in most sectors, the recovery of the economy will continue to influence buyer demand. In another NAHB report, more metropolitan statistical areas have posted gains in housing permits, home prices and job opportunities, indicating more residents can safely invest in homeownership after finding a stable job in a healthier housing market.