Confidence is at an All-time High

January 2017

Builder and Consumer Confidence End the Year on a High Note

Following the November election results, builder confidence is at an eleven year high as reported by the National Association of Home Builders/Wells Fargo Housing Market Index.[1] The index jumped seven points to a level of 70, the highest reading since July 2005.

Builders and other stakeholders in the residential construction industry have high hopes for 2017, expecting the incoming administration will be reduce costly regulatory burdens, particularly for small business which have risen by more than 29% in the past five years.

Along with increases in builder confidence, consumer confidence is at its highest level since August 2001. According to the Consumer Confidence Index, December hit a level of 113.7, a 4.3 point increase from the upwardly revised November index. While Consumer Confidence decreased on the present situation index, outlook for future conditions rose to 105.5, an 11.1 point increase from November.

As we head in 2017, economic fundamentals continue to look optimistic with the U.S. economy finally shaking off the worst effects of the 2008 recession. The incoming administration has spurred optimism across the country with its promises of regulation and tax decreases along with reviving the manufacturing sector which has prompted an expected GDP growth of 2.1% for 2017.

[1] Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

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