Investment, Mortgages, Property

Rising Labor Market and low mortgage rates increases confidence in new home construction

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Rising Labor Market and low mortgage rates increases confidence in new home construction

Home builders in the U.S have had a recent confidence boost regarding single-family homes despite the slight slump in the economy.

Confidence from construction companies increased 2 points on August’s housing market index to 60 out of 100, for 2016 this is the second highest level this year results came from a survey conducted by the National Association of Home Builders (NAHB). The estimate for the next 6 months also saw an increase of one point to 67.

The chief economist of NAHB commented that the combination of historically low mortgage rates, increased household formations and a firm labor market would enable the housing market to continue on an uphill path for the rest of 2016.

The builder confidence index is a key metric that indicates if any new construction will be undertaken, which in-turn does generate job creation and encourages the sale of a wide range of home related products and materials.

Overall for 2016, builder sentiment has fluctuated and on a year on year comparison the index is lower than it was in 2015. Data from the Commerce Department. The highest point of confidence since the last recession was in October 2015 which was 65 points.

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National Association of Home Builders,NAHB,Commerce Department, New home construction, low mortgage rates