Dive Brief:
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Homebuilders are more confident about the housing market than they have been in nine years, the November National Association of Home Builders/Wells Fargo Housing Market Index (HMI) revealed on Tuesday.
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NAHB Chariman Kevin Kelley attributed builder optimism to “growing confidence among consumers.” In addition, builders have reported they are seeing more foot traffic through model homes and an increasing number of signed contracts for new houses.
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Builders expressed satisfaction with current sales and confidence that sales over the next six months will be strong, the index showed.
Dive Insight:
The more confident homebuilders are, the better the stock market performs. The stock market reached record highs on Tuesday after the NAHB announced that homebuilder confidence improved beyond the expectations of economists.
The reason: Investors rely on the HMI, which is based on the latest data, to predict the following month’s Commerce Department report on housing starts, new home sales and construction spending.
Increases in those numbers signal a pending buying spree for appliances, home goods and construction supplies.