US builder confidence in single-family homes hits 11-year high

Donald Trump may have given the index a boost

New York /
Dec.December 15, 2016 02:45 PM

U.S. builder confidence in single-family homes hit an all-time high in December, reaching the highest level seen in more than a decade.

According to the National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence for new single-family homes across the U.S. rose seven points from last month. This month’s reading of 70 points was the highest seen since July 2005, when confidence also reached 70 on the index.

The spike, however, might be an outlier. NAHB Chairman Ed Brady said December’s increase can largely be attributed to “a post-election bounce.”

“Builders are hopeful that President-elect Trump will follow through on his pledge to cut burdensome regulations that are harming small businesses and housing affordability,” Brady said in a statement. “This is particularly important, given that a recent NAHB study shows that regulatory costs for home building have increased 29 percent in the past five years.”

Trump gave a speech to the NAHB in August and outlined plans to loosen mortgage lending standards. Some critics have warned that while this may pave the way for more people to become homeowners, it could also drive up prices as demands from homes increases.

“As we learned just a few years’ ago, loosening lending standards can lead to dangerous housing and credit bubbles, which cause real damage when they eventually pop,” Matthew Pointon, property economist at Capital Economics, told Business Insider in November.

Unsurprisingly, 2009 was a low point in the NAHB survey’s history, when the highest builder confidence recorded for the year was 19 points. The lowest, according to historical NAHB data, was 8 points in September 2009.

The index is based on a monthly survey that measures builders’ opinions on the strength of current and future single-family home sales, which they label as “good,” “fair” or “poor.” They are also asked to rate the volume of prospective buyers as “high to very high,” “average” or “low to very low.” — Kathryn Brenzel


Related Articles

arrow_forward_ios
Make Greenland Great Again? Trump wants to buy Arctic territory
Make Greenland Great Again? Trump wants to buy Arctic territory
Make Greenland Great Again? Trump wants to buy Arctic territory
Hamptons’ priciest summer rental to host MAGA extravaganza next month
Hamptons’ priciest summer rental to host MAGA extravaganza next month
Hamptons’ priciest summer rental to host MAGA extravaganza next month
From left: Letitia James, Donald Trump, Eric Trump, Ivanka Trump, Allen Weisselberg, and Donald Trump Jr. (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
NY AG files civil fraud suit against Trump, children and company
NY AG files civil fraud suit against Trump, children and company
From left: Kris Jenner, Donald Trump and the Trump Tower at 721–725 Fifth Avenue (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images and NYSCEF)
Trump Org sues scandal-plagued school once tied to Kris Jenner
Trump Org sues scandal-plagued school once tied to Kris Jenner
Donald Trump with 21 Vista Drive (Getty Images, Brown Harris Stevens)
Trump’s former Greenwich mansion up for grabs
Trump’s former Greenwich mansion up for grabs
Donald Trump and Allen Weisselberg with Trump Tower
Ex-Trump CFO Allen Weisselberg pleads guilty, will testify against firm
Ex-Trump CFO Allen Weisselberg pleads guilty, will testify against firm
From left: Donald Trump and former Trump CFO Allen Weisselberg (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
Former Trump CFO close to plea deal in tax fraud case: report
Former Trump CFO close to plea deal in tax fraud case: report
Blackstone's Jonathan Gray, Fortress Investment's Peter Briger, Harry Macklowe and Donald Trump (Blackstone, Long Arc Capital, Getty Images)
The Fortress real estate hall of fame
The Fortress real estate hall of fame
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...