Call Us Today ~ Local: (443) 599-9541 || Toll Free: 1-888-342-0585

Homebuilders super happy but not building more homes: Here’s what’s up with that

Home » Real Estate » Homebuilders super happy but not building more homes: Here’s what’s up with that

Homebuilders super happy but not building more homes: Here’s what’s up with that

“During the course of the recession, the builders, being entrepreneurs, were sometimes more optimistic than the market has been. I think as we come back to normalcy, you’ll see a pretty parallel track,” said Jerry Howard, NAHB’s CEO. “They have to be optimistic, or they have to get into another profession.”

Others have noted that the NAHB’s monthly sentiment survey is more weighted to smaller, custom builders. According to its website, the survey, which has three components (current sales, sales expectations in the next six months and current buyer traffic), is a, “weighted average of separate diffusion indices for these three key single-family series.”

John Burns, of John Burns Real Estate Consulting, does a similar survey with different weighting, which favors the big volume public builders. He had this take:

“We asked the same three questions that the NAHB asks at the same time of 311 homebuilders overseeing 11 percent of all U.S. new home sales. Builders told us that sales and expected sales are better than average, and traffic is slightly worse than average. Since the builder responses were virtually identical to the responses last month and last year, and this survey is weighted 59 percent to actual sales rather than sales expectations and buyer traffic, I am surprised by the sharp increase in the [NAHB] index.