Builder confidence in the market for new single-family homes rose strongly in early April, according to the National Association of Home Builders’ latest Housing Market Index. The HMI rose five points to 69 in April, bringing it back up to speed with its level in late 2003 and January 2004.
“Favorable interest rates and strong home-price appreciation definitely are still driving demand in today’s housing market, despite the recent bump-up in mortgage rates,” said NAHB President Bobby Rayburn, a home and apartment builder from Jackson, Miss. “Builders actually saw quite a few buyers hurrying to lock in financing as mortgage rates firmed up.”
“We expect the demand for single-family homes to remain quite strong in coming months, despite the rise in long-term mortgage rates, as growth in employment and household income accelerates,” explained NAHB Chief Economist David Seiders. “Indeed, the economic and demographic foundations for housing are very solid, supporting both home sales and house prices. Theories of house price ‘bubbles’ are bound to be discredited in the process.”
The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Home builders are asked to rate current sales of single-family homes, expected sales in the next six months and traffic of prospective. Scores for responses to each component are used to calculate a seasonally adjusted index.
Two out of three of the HMI’s component indexes rose strongly in April. The index gauging current sales of new single-family homes and the index gauging sales expectations for the next six months each rose six points to 76. Traffic of prospective buyers was virtually unchanged from March, down a single notch to 48.
“Northeast Florida builders clearly expect housing demand to be well maintained in coming months,” said Greg Matovina, president of the Northeast Florida Builders Association. “Nationally, the industry experts are currently forecasting 1.07 million sales of new homes in 2004, off only marginally from last year’s record pace. Locally we anticipate continued high growth in just about all areas of the First Coast. Certainly, there continues to be considerable activity posted in the form of single-family residential permits, and we are hearing about planned new projects that should keep us busy for quite a while.”
Permits up
Data collected from city and county building departments by the Northeast Florida Builders Association for the Jacksonville Metropolitan Statistical Area (Clay, Duval, Nassau and St. Johns counties) indicates continued strong growth in residential construction.
Compared to the first quarter 2003 when 2,695 permits were reported, the four-county area demonstrated a 21 percent increase in permits the first quarter of this year with 3,252 issued. Clay and St. Johns counties reported growth rates of 24 percent and 26 percent respectively, and Duval’s growth was at 11 percent.
Nassau County reported 154 permits during the first quarter 2003 and 262 for the same period 2004. This 70 percent increase in residential construction permits reflects the population and commercial growth of the area.
Clay
March 2004 261
February 2004 169
2004 Year to date 607
2003 Total 2,313
2002 Total 2,042
Duval
March 2004 591
February 2004 522
2004 Year to date 1,481
2003 Total 5,646
2002 Total 5,147
Nassau
March 2004 80
February 2004 87
2004 Year to date 262
2003 Total 1,005
2002 Total 883
St. Johns
March 2004 424
February 2004 240
2004 Year to date 902
2003 Total 3,012
2002 Total 2,401
MSA total
2004 Year-to-Date 3,252
2003 Total 11,976
2002 Total 10,473
The Northeast Florida Builders Association provides education, research, legislative representation, media relations, promotions and programs for its 1,500-plus builder and associate members. The Association is celebrating 60 years of service to members and to the community through various charitable efforts.