 |
Housing Market Index Rises in August |
|
Housing Market Index Rises in August |
WASHINGTON, DC -- (August 15, 2001) -- Low interest rates and strong consumer demand combined to boost the housing market in August as the National Association of Home Builders' Housing Market Index (HMI), released today, moved up six points from 56 in July to 62, the highest reading this year.
"Mortgage interest rates have declined by about 20 basis points in the last month to stand at 7 percent, their lowest level since March," said Bruce Smith, a builder from Walnut Creek, Calif., and president of the National Association of Home Builders (NAHB). "With demand for housing on the upswing, and many builders grappling with a shortage of labor and building lots, home prices across much of the nation are rising. Home buyers are taking note, preferring to invest in housing rather than in the declining stock market."
The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Home builders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair," or "poor." They are also asked to rate traffic of prospective buyers as either "high to very high, "average," or "low to very low." Scores for responses to each component are used to calculate a seasonally adjusted overall index, where any number over 50 indicates that more builders view sales conditions as good than poor.
All three components of the HMI rose in August to their highest levels for the year. The index that tracks present single-family home sales posted the largest gain of seven points to stand at 68. The index predicting expected sales for the next 6 months increased three points to 69 while the index rating traffic of prospective buyers posted a five-point gain at 45.
The National Association of Home Builders is a Washington- based trade association representing more than 203,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the more than 1.5 million new housing units projected for 2001. During a typical year, residential construction accounts for about five cents of every dollar spent in the U.S. economy, making home building one of the largest and most influential industries in the country.