Homebuilder Confidence In Housing Is Growing : What It Means To Buyers In Cincinnati.

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As the “pulse of the single-family housing market”, the Housing Market Index is a monthly product of the National Association of Homebuilders.

Its scores range from 1-100, with a reading a 50 or better suggesting “favorable conditions” for builders.

Builder Confidence Is Rising

Because of its methodology, the Housing Market Index can offer excellent insight into the market for newly-built homes.

This is because its value is a composite of three survey questions:

1. How are market conditions today?
2. How do market conditions look 6 months from now?
3. How is the prospective traffic of new buyers for new homes?

Builder responses are collected, weighted, then presented as the Housing Market Index.

According to the NAHB, October’s HMI reading of 16 is its highest value in 5 months. The uptick hints that the market for newly-built homes may rebound more quickly that this summer’s weak new homes sales figures would otherwise suggest.

A Post-Tax Credit Return To Normal?

You’ll remember that, between April and August, the number of new homes sold per month fell by 30 percent and the available, new home inventory climbed 2.3 months.

This month, though, builders report much better foot traffic and, as a result, have raised their expectations for the next six months of sales. Low mortgage rates are likely aiding the optimism, too.

As compared to 1 year ago, average, 30-year fixed mortgage rates are lower by 0.75 percent, a payment savings of per 0,000 borrowed.

Prepare For Less Negotiation With Builders

For home buyers in Cincinnati, the jump in builder sentiment may spell bad news in the long-term. With builders feeling “uppity”, there’s less chance to grab a discount or free upgrades at the point of negotiation. It mean less house for your home buying money.

At least mortgage rates are still low.

If your plans call for buying a home in the early part of 2011, you may want to consider moving up your time frame. Today’s market looks ripe for a good deal.

Call or for a rate quote. I love to work with my readers.

(Post adapted from Bring the Blog, a blog-writing service for loan officers)

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.