Economic Snapshot: Builder confidence reaches record highs for second consecutive month

The Housing Market Index once again reached levels we haven’t seen in nearly a decade, which hopefully means good news for the future of the market.

Housing Market Index

Builder confidence increased one point to a level of 61 in August. This is the highest reading for the index since November 2005, surpassing last month’s record-breaking levels.

Two of the three HMI components posted gains in August. The index measuring buyer traffic rose two points to 45 and the index measuring current sales conditions increased one point to 66. The index charting sales expectations in the next six months remained unchanged at 70.

The West and Midwest regions each rose three points to 63 and 58, respectively. The South increased two points to 63 and the Northeast head steady at 46.

Existing home sales

Total existing home sales rose 2.0 percent to a seasonally adjusted annual rate of 5.59 million in July, up from a downwardly revised 5.48 million in June. This is the third consecutive month of increases for existing home sales.

Sales in July remained at the highest pace since February 2007. Sales have now increased year-over-year for 10 consecutive months and are 10.3 percent above he previous year.

The median existing home price for all housing types in July was $234,000, which is 5.6 percent above July 2014. July’s prices mark the 41st consecutive month of YOY price gains.

Total housing inventory at the end of July declined 0.4 percent to 2.24 million existing homes available for sale, 4.7 percent below the previous year. Unsold inventory is at a sales pace of 4.8 months, down from 4.9 months in June.

The percent share of first-time buyers declined for the second consecutive month, falling from 30 percent in June to 28 percent in July. The National Association of Realtors believes low inventory levels and rising prices are likely to blame for the decline in first-time buyers.

Housing starts

Privately owned housing starts in July were at a seasonally adjusted annual rate of 1,206,000, 0.2 percent above the revised June estimate of 1,204,000 and 10.1 percent above the July 2014 rate of 1,095,000.

Single-family housing starts were at a rate of 782,000. This is 12.8 percent above the revised June figure of 693,000.

Privately owned housing completions in July were at a seasonally adjusted annual rate of 987,000. This is 2.4 percent above the revised June estimate of 964,000 and 14.6 percent above the July 2014 rate of 861,000.

Single-family housing completions were at a rate of 627,000, which is 1.4 percent below the revised June rate of 636,000.