Projected Home Market Good News for Small Contractors – If Available Lots can be Found

March 2018 NAHB Housing Market Index Shows Home Builder Confidence Dipping on Worries Over Available Lots

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) is projecting increased activity in construction of homes in March. This is great news for small contractors, electricians, plumbers and other businesses likely to be hired to build  these homes. But the projection is being met with concern as contractors worry there won’t be enough buildable lots.

March 2018 NAHB Housing Market Index

The index is near record level territory, driven by consumer demand and the optimism builders are feeling. However, the high demand may be too much for builders if enough suitable lots can’t be found, this according to National Association of Home Builders Chairman Randy Noel in a recent press release.

The index is an indicator of how the housing market will perform. And for many small contractors, electricians, plumbers, and all other related businesses involved in the building of these homes, it forecasts how well they will do.

To create the index, market conditions of present-day new-home sales and the next six months are rated good, fair or poor. Prospective buyer traffic for new homes is also rated as high to very high, average or low to very low.

A range between zero and 100 is calculated based on weighted average and a seasonally adjusted index. Ratings of more than 50 indicate builders view sales conditions as good instead of poor.

Hence a rating of 70 for March is clearly big news.

The growth in the segment is due to a robust labor market, higher incomes and an economy still in growth. This has increased demand for home ownership. National Association of Home Builders Chief Economist Robert Dietz, explains in the press release. “With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.”

Among the factors entering into the overall projection, the Home Market Index showed a rating of 77 for March, while expectations for single family homes over the next 6 months showed a rating of 78 and buyer traffic was down by three points to 51.

Projections for home building are highest in the Western United States with a rating of 78. Meanwhile, projections are 74, 65 and 56 in the Southern, Midwestern and Northeastern U.S. respectively. See more of the index numbers below.March 2018 NAHB Housing Market Index Shows Home Builder Confidence Dipping on Worries Over Available Lots

What is the Housing Market Index (HMI)?

The National Association of Home Builders/Wells Fargo Housing Market Index has been used to gauge the outlook of the US housing sector for the past 30 years. The data is gathered from a survey of the National Association of Home Builders’ more than 140,000 members and over 800 state and local associations.


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Michael Guta

Michael Guta Michael Guta is a Staff Writer for Small Business Trends focusing on business systems, gadgets and other small business news. He has a background in information and communications technology coordination.

One Reaction

  1. There will always be a need for new houses. But I think that there is an evolution for shared properties as in condos and apartment buildings.

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