Homebuilders Have Not Been This Confident Since The Peak Of The Last Housing Bubble

Tyler Durden's picture

Builder confidence in the market for newly-built single-family homes jumped six points to a level of 71 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the highest reading since June 2005 - the ultimate peak of the last housing bubble.

What happens next?

"Builders are buoyed by President Trump’s actions on regulatory reform, particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas.

“While builders are clearly confident, we expect some moderation in the index moving forward,” said NAHB Chief Economist Robert Dietz. “Builders continue to face a number of challenges, including rising material prices, higher mortgage rates, and shortages of lots and labor.”

All three HMI components posted robust gains in March. The component gauging current sales conditions increased seven points to 78 while the index charting sales expectations in the next six months rose five points to 78. Meanwhile, the component measuring buyer traffic jumped eight points to 54. Looking at the three-month moving averages for regional HMI scores, the Midwest increased three points to 68 and the South rose one point to 68. The West dipped three points to 76 and the Northeast edged one point lower to 48.

Of course, "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

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jus_lite_reading's picture

The co-founder of Home Depot praised Trump last night. Of course he is only repeating what we already know- QE to inifinity! ;)

Ghost of PartysOver's picture

National Association of Home Builders is the most useless report ever created.  It does not even rise the level of absurdity of the BLS Labor/Claims report.   For me, this article gets Crap Canned.

Silver Bug's picture

More signs of the "Trump effect". The optimism is real and it has real effects. 

 

http://marcfabersblog.blogspot.com/2017/03/trump-is-good-for-asia-marc-f...

JRobby's picture

Yea! And it looks like Yellen and "the market" will cooperate on the rate side..................(crickets chirping)

Yellen is a political POS.

flicker life's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... http://bit.ly/2jdTzrM

JRobby's picture

Stop up voting yourself flicker of life. Your link is a credit card phishing scam.

Dr. Engali's picture

What happens next? We print  like a mother fucker, that's what happens next.

spastic_colon's picture

What happens next?

the measure gets changed/seasonally adjusted to show even more optimism.

NotApplicable's picture

This should end well.

hedgeless_horseman's picture

 

In Houston the commercial and multi-family builders have been booming!

Either they way over built, or we're going to need more immigrants.

And get this, all the massive new construction of hospitals is soley due to the fact that their Medicare reimbursements increase based on the hospital's square footage!

Now, that is a quality metric one can believe in!!!!

hotrod's picture

Multi Family units in Atlanta,  MASSIVE.  Never seen so many units going up.

ejmoosa's picture

And many of these are being induced  through property tax abatements....

 

While the rest of us pay full property taxes and our home values fall.

voxale's picture

Gotta see those 120% LTV Option ARMs  for undocumented immigrants come back before the top can be called.  Oh, and Gartman getting confortably long builders. 

corporatewhore's picture

i'm hearing rumblings within the next few months.  Keep your fingers crossed!

Oquities's picture

don't you mean "illegal aliens" Mr. Orwell?

SmilinJoeFizzion's picture

With AirBnB and other house sharing sites its not only flipping that is driving these prices higher. Its now a business model to own 10+ homes and use them as short term rentals. That, and that alone can keep this bubble inflated to infinity as long as you can lock into a low interest fixed rate mortgages and have other people paying our mortgage

ebworthen's picture

Boom-Bust yet again, except this time the out of work construction guys will be going back to Mexico instead of Lowe's or Home Depot.

mily's picture

Nothing happens

I am Jobe's picture

Smell the rise in foreclosures, increase property taxes 

tbone10's picture

Oh right right fuck you fake news bullshit!!!

MuffDiver69's picture

Who the heck in business isn't confident that we won't have four years of regulatory pile on and we are going to see deregulation. That doesn't change any fundamentals, but I can tell you it helps...Unless you were part of it it's hard to overestimate the dismal mood of business the last eight years.

I will repeat:.0000000001 of Trump is better then any Clinton.

Snaffew's picture

why even talk about Clinton...that shit is done and she will never come back---now we have to deal with trump---his 2 executive orders so far have resulted in no oversight on our number one most precious resource---fresh water, and the second---TPP will hurt american workers and ultimately consumers far more than it will help.  Deal with what we have, which even if better than Clinton, is still downright terrible.  If you own a large Corporation, then trump is great.

Rolln's picture

Everything being built is twice as small and more expensive. Dont pay for that BS, or you are part of the problem...

silverer's picture

Hey, after all: What can't you buy with a sixty year mortgage?

order66's picture

Meanwhile.....former Fed hack William Poole says that the current subprime issue may be worse than 2008. http://www.cnn.com/2017/03/14/opinions/risk-of-another-housing-crisis-po...

Freddie Mac holding 36% "credit enhanced" mortgages.

So THAT'S why the Fed now owns every mortgage. When they fail, the banks will have no liability beyond what can be covered by cash reserves.

youarelost's picture

Das rite. Everyone gets a free house

spastic_colon's picture

particularly his recent executive order to rescind or revise the waters of the U.S. rule that impacts permitting

 

because all permits immediately end up as construction / s

markitect's picture

Im in the business and the bust is here.  Every time I check certain zip codes for market activity Im seeing 120+ million dollar homes coming onto market in areas that used to see maybe one or two million dollar sales a year.  Rental towers are now offering 2-3 months rent free because its so over-saturated.  But the best metric is organic sales, not spec.  Our firm hasn't had a single phone call to build someone a new home since last April.  We've had a little commercial and some small remodel stuff, but no more big new homes.  I do believe that everyone who could afford a home already has one and the next wave of home buyers needs stronger incomes or less debt to get into the market.  Until then price correction.

hotrod's picture

LIke inside the perimeter 285 in Atlanta.  Over the last couple of years seems like everything is 1 million.  Yes there are 1950s shacks available for 500,00 but pricing is way beyond payscales for Atlanta.  We are not the North East or California in terms of per capita incomes.  For Gods sake we only have 1 pro sports championship in the history of our city. 

Houses Depreciate's picture

With record high levels of excess, empty housing, why would you expect a call?

Sick Underbelly's picture

So, from the charts....

a) we're at the top...PEAK CONFIDENCE...and it'll take another 3 years to get to the bottom

b) there's a disconnect between confidence and mortgage rates at about October, when rates began to climb.  

I guess the author is trying to tell us there's too much confidence, and it should shrink as mortgage rates increase?

But but but....we still have 3 years before confidence is lowest?

Sick Underbelly's picture

I know this is OT...but something has changed with the ads around here.   I'm starting to get more popups coming through, and ads for opening brokerage accounts, stupid "games" that'll keep me up all night, etc.

This shit's really starting to annoy me....just have to complain, as things aren't as they used to be...and I despise ads.

Yen Cross's picture

 I still like shorting commercial R/E moar. The requirements for commercial real estate investment are/is much lower. [It wasn't always that way]

 Being accredited on margin.