According to NAHB/Wells Fargo Housing Market Index (HMI), builder confidence remain high. The index in October this year hit 85, an historic record for the second month in a row. September and October where the first two months the index has ever been above 80. Usually 50 is already a good number. In October 2019 the index was 71.
What keeps builder confidence high is the strong demand for newly-built single-family homes and, at the same time, low inventory. And builder confidence looks much higher in Florida Real Estate, where new buyers are coming every day from the northern states and record-low interest rates keeps demand strong. Buyers changed the way they see the concept of “home”, as the new place to live after the pandemic needs to be spacious, feature an office, big kitchens, eventually a private gym and a big outdoor area. That you can find for affordable prices in the suburbs, exurbs and small towns. And Florida is the perfect state to look for those places, since the Sunshine States, besides having attractive real estate prices, also offers good weather year round, no income state taxes and many other advantages for people planning to move.
What we see today is an historic gap, where single-family homes sales are way above new ones coming to the market. There is a need for more homes, and builders are very aware of that. That was not the sentiment at the beginning of the pandemic, when builders slowed production. Now they are caught off guard by this heavy demand.
However, besides the evident need for more homes, builders have to face now the lack of available land and the competition is fierce for the few existing ones.
Find out more about HMI data and housing statistics visiting nahb.org/hmi