Housing Market Index Excites
The National Association of Home Builders Housing Market Index is one of the key housing market statistics that we track at FREEandCLEAR. The Housing Market Index incorporates factors such as current and expected new home sales and interest level from potential new home buyers. It is important to highlight that the index focuses on new home sales, so homes built by builders that have never been lived in before, as opposed to existing home sales, which represents a larger portion of the overall housing market.
The housing market index bounced back strongly in June following a decline in May. For June 2015, the Housing Market Index came in at 59 as compared to 54 in May 2015. Any figure above 50 is considered positive and June represents the 12th consecutive month with the index above 50. The June figure came in well above industry analyst expectations as all three components of the index rose as compared to May. The present home sales component of the index led the way, jumping 7 points to 65. In a strong sign for pending new home sales, the future sales component of the index increased 6 points to 69. Although the home buyer traffic component of the index failed to break 50, which is the benchmark for a positive reading, it did increase 5 points to 44 in June, lead by slowly increasing interest from first-time home buyers. (Source: Bloomberg)
What it Means for Mortgage Borrowers
After a relatively disappointing housing market index report for May, the June report reinforces the strength of the new home market which has outperformed the existing home market for the past several months. Combined with the record-setting May housing starts report, the housing market index report shows that home builders and developers are bringing new supply onto the market to meet surging demand from new home buyers. All indications point to a strong Spring home buying season in the new home sector despite the increase in mortgage rates over the past six weeks. A slowly improving economy and job market appears to be giving prospective home buyers the confidence needed to start the home search process. If you are thinking about buying a home in the next six-to-twelve months consult our Mortgage Process Guide to understand the ins and outs of the mortgage process and use our Mortgage Qualification Calculator to determine what size mortgage you can afford. Additionally, with mortgage rates fluctuating, regularly check the INTEREST RATES feature on FREEandCLEAR to review rates and fees for lenders in your area.
The FREEandCLEAR Mortgage Expert
%