New home prices will rise as sales activity continues to increase across all four regions. The monthly Housing Market Index has now nearly doubled in value since June 2011.
Homebuilder confidence is soaring.
For the fourth straight month, the National Association of Homebuilders reports an increase in its Housing Market Index. The index climbed 4 points to 25 this month — its second four-point gain since October.
The HMI is now at a 55-month high.
The Housing Market Index itself is a composite reading; the result of three home builder surveys sent by the National Association of Homebuilders to its members monthly. Home builders report back on current single-family new home sales volume; projected single-family new home sales volume for the next 6 months; and current buyer “foot traffic”.
The National Association of Homebuilders then results compiles the surveys into a single reading.
In January, home builders reported improving new home sales conditions across all three categories :
- Current Single-Family Sales : 25 (+3 from December)
- Projected Single-Family Sales : 29 (+3 from December)
- Buyer Foot Traffic : 21 (+3 from December)
The Housing Market Index corroborates recent U.S. government data that suggests housing is mending in Arizona. Both Housing Starts and New Home Sales have out-performed expectations of late, it’s been shown, and the stock of new homes for sale nationwide is dwindling.
All of this, of course, is happening as demand from buyers heats up. Foot traffic through builder homes is higher than it’s been in more than 3 years, say the builders — a time period that includes the duration of the 2010 home buyer tax credit.
It’s no surprise, therefore, that builders expect a strong 2012 and a rise in new home prices.
Jobs data is improving, mortgage rates remain low, and housing momentum is building. For home buyers in Arizona , however, it may spell higher new home prices ahead. Big demand and small supply creates scarcity and scarcity correlates to rising prices.
If you’re shopping for a new home, the best “deal” may be the one you find today.
Always be sure to have your own representation when visiting new home communities by taking your Buyer Representative with you on your first visit.
