Track the housing market with these two statistics

The National Association of Homebuilders recently released two statistics that are very important for anyone in the housing market to know. These two figures are the NAHB Housing Market Index (HMI) and the Housing Opportunity Index (HOI).

The HMI (on a scale of 0-100) tracks single-family housing starts over the history of the index and is a measure of builder confidence. It also looks at buyer traffic at new construction, builder sale expectations, and current sales. NAHB reports that this figure increased by four points in February to 29. This is the highest it has been since April 2007 and represents an steady recovery by the housing market. This index has risen for the last five months for a total of 15 points (an increase from 14 in September of 2011 to 29 in February of 2012). According to NAHB Chairman, Barry Rutenberg, this increase represents a doubling of builder confidence in the last few months. Additionally, this is the “longest period of sustained improvement” the NAHB has seen since 2007 (NAHB Chief Economist David Crowe).

Although the NAHB is encouraged by these numbers, it is important to note that in many areas, foreclosures are still competing sales with new homes and there are some challenges with appraisals coming in less than the cost of construction. These factors need to be overcome for the HMI to return to moderate levels.

In addition to this promising number for new construction, the Housing Opportunity Index is at an all-time high. In fact, the 75.9 during fourth quarter 2011 registers as a record high for the 20 year index history. The number represents that 75.9% of all “new and existing homes sold in the fourth quarter were affordable to families earning the national median income of $64,200.”

Sources:
• http://www.nahb.org/news_details.aspx?sectionID=135&newsID=15036
• http://www.nahb.org/news_details.aspx?sectionID=134&newsID=15031