Over the last year, the real estate market fell into a bit of a slump, home builder confidence included. However, as we turn the corner to spring, confidence levels begin to climb once again.
Home Builder Confidence Jumps from 35 to 42
Since the Great Recession of 2009, the United States faced a longstanding housing inventory challenge. Further complicating matters, housing starts actually fell 5% in January 2023. With the latest slide, housing starts dropped to their lowest level since June 2020, early during the COVID-19 pandemic.
But there is a silver lining. Despite contending with higher prices for both materials and skilled labor, home builders show optimism heading into the spring. In the latest National Association of Home Builders (NAHB) housing index, home builder confidence surprisingly climbed from 35 to 42. Overall, this level represents the highest reading since September 2022.
Sales of Existing Homes Fell for the Twelfth Month in a Row
Although home builder confidence recently increased, the housing market has a long way to go, statistically speaking. Existing home sales (which accumulate roughly 90% of the real estate market) dropped for the twelfth straight month.
Thus, existing home sales plummeted to the lowest reading since 2010. Additionally, existing home sales fell 37% lower year-over-year. Referring back to the housing inventory issue, homes available for sale currently sit at a 2.9-month supply, well below the equilibrium point of 6.0.
New Home Sales Supply Optimism for Home Builder Confidence
While existing home sales paint a consistently pessimistic picture, new home sales tell a different story. Accounting for the remaining 10% of activity throughout the United States real estate market, new home sales shocked investors with a gain of 7% from December to January 2023.
As spring draws closer, real estate professionals tend to see more activity throughout the market. To learn more about the impact of home builder confidence, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.
Information accredited to MBSQuoteline.
Please note: The safety of our staff and clients is our highest priority. Effective immediately, Plymouth Title Guaranty Corp. will be taking the following precautions to limit the spread of the COVID-19 virus:
All purchase transactions need to take place at a Plymouth Title Guaranty Corp. closing office.
- If a party to the closing is not feeling well, please contact your closer before the closing so appropriate precautions can be taken.
- We ask visitors to utilize the restroom in our building upon arrival to thoroughly wash their hands before entering our office.
- Only individuals required to sign and/or deliver documents at closings will be allowed in our office. Specifically, closings will be limited to borrower(s), seller(s), agents, and lenders.
- All pens used in the closing will be given to the client after use.
- All closing rooms will be cleaned and disinfected in-between each closing.
- Those picking up checks at our office will be instructed to call our main line and request to speak to a staff member who will plan for delivery to the lobby or parking lot of our office.
- All staff will refrain from shaking hands before or after closings and ask clients to do the same.
Please be advised that our staffing may be impacted during this unprecedented event. While we are committed to continuing to provide outstanding service, we ask for your patience in the face of this pandemic.