Home Builders and Small Businesses Show Optimism for Growth

Recently, the National Association of Home Builders released their Housing Market Index (HMI).  This index is created from a survey where builders are asked questions about the current state of the economy and the housing market. Weighted in the housing market portion of the survey are questions about present and future home sales and forecasted prospective buyers of new homes.

The HMI that was recently reported for the month of August is now at a level of 67.  This level is still strong and shows that builders are still optimistic with current market conditions.  Increasing construction costs and fear of tariffs brought their “confidence” down by 1 point from their September index.  Anything over 50 is seen as expansionary and optimistic.

Another economic survey called the Small Business Optimism index measures components of small businesses such as plans to add employees, plans to increase expenses, expectation of increased sales, current inventory levels, propensity to increase inventories, expectation of the economy to expand, current credit conditions and more.

This current release was at 107.9 which is the second highest number in 45 years!  Expectations in new job creations, an improving economy, increasing of company spending and plans to increase inventories pushed this index higher thus showing strong optimism.

These reports point to an overall healthy environment for homeowners.  Very high levels of demand and optimism for new homes and very optimistic and successful businesses are a good sign of a strong and healthy housing market and point to further home appreciation.