Homebuilders Optimistic for Summer
Good news! Homebuilder confidence stayed steady for the fourth month in a row in May. This reflected the overall optimistic outlook for the new-home market, even though the sales pace of homes has slowed a bit. Homebuilders are cautiously optimistic about the future, but are still not building at the level they were building before the housing bust.
Building Sentiment Index
The builder sentiment index released by The National Association of Home Builders/Wells Fargo was unchanged at 58 and this indicates that builders view sales conditions as good, rather than poor. A reading above 50 indicates good signs and this rating had been in the low 60s for almost 8 months up till February. Their outlook for sales for the next six months has increased to the highest level since December.
After strong growth in the housing market during 2015, the growth has stayed steady and the sales of new homes slid to a seasonally adjusted annual rate of 511,000 in March, which is the third monthly decline in a row. This is not a bad sign, however, as sales during January-March were slightly ahead of the year to date pace of 2015, which helps to make up for the decline somewhat.
Still a Ways to Go
The improving job market and the low mortgage rates have helped to boost sales, but the new-home market still has a long way to go to come back from the housing crash. Growth is still expected, but builders are being cautious about the numbers they expect. Cautious is the name of the game in the real estate market as a whole, simply due to the volatility of the market, as seen during the recession a few years back.
Even though new homes are only a part of the housing market, they have a huge impact on the economy as a whole. Each new home built creates an average of three jobs for a year, and generates almost $90,000 in tax revenue, which is good for all of Las Vegas.