The Trump bump has spread to the home building industry, with builders more optimistic now than they’ve been in nearly a dozen years.
The Housing Market Index,
a gauge of the single-family construction industry, climbed to 71 in March — the highest reading since June 2005.
An index of more than 50 is an indication that there are more U.S. home builders who
view conditions as good than who view them as poor.
The index is jointly produced and published by the National Association of Home Builders and Wells Fargo.
“Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” NAHB Chairman Granger MacDonald said in the report.
The index was
65 in February and just 58 in March 2016.
The index is derived from a monthly survey of home builders and comprised of three components.
The component that measures buyer traffic jumped eight points to 54. A seven-point gain was recorded for the component that gauges current sales conditions, which was 78. The index that reflects sales expectations over the next six months was up five points to 78.
But despite the robust numbers, NAHB Chief Economist Robert Dietz cautioned that the index will moderate due to
rising material prices, higher mortgage rates and shortages of lots and labor.
Based on a three-month moving average, the index in the Midwest was 68, climbing from a month earlier by three points — the biggest month-over-month rise. The South’s index was up a point to 68.
But in the Northeast, the index slipped a point to 48, while the West saw a three-point decline to 76.
