The latest National Association of Home Builders/Wells Fargo Housing Market Index, released Monday, Oct. 19, shows builder confidence in the market for newly-built single-family homes increased two points to 85 in October, surpassing the previous all-time high of 83 recorded in September. According to the report, this is the first time that for two consecutive months the national index has been above 80.
Karin Kay, sales manager for Sable Homes, the West Michigan region’s third largest home builder, says that she remains optimistic with housing trends for the region because of the strong housing market going into the pandemic, but is very concerned.
“This report doesn’t surprise me,” said Kay. “As I have talked with other builders in the West Michigan, there appears to be a steady line of new buyers throughout the region. I attribute this increase in demand to the very low inventory of existing homes and low interest rates.”
Kay explains that home buyers are turning to new construction because of high costs associated with purchasing existing homes on the market. “For the final quarter of 2020, we are estimating a higher number of customers choosing to build a new home, which could take six months to complete.”
Kay went on to say that this is also boom for the West Michigan economy because, according to the National Association of Home Builders, the one-year impact of building 100 single-family homes in a typical local area include $28.7 million in local income, $3.6 million in taxes and other revenue for local governments and 394 jobs.
In addition, single-family starts showed continued growth in September as overall housing production increased 1.9 percent to a seasonally adjusted annual rate of 1.42 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.