HBA: Optimism in housing
LANSING – A statewide survey shows a strong surge in optimism among homebuilders and remodelers, an indication of a stronger housing market in 2013. The Michigan Housing Index, which is conducted by the Home Builders Association of Michigan, recorded its highest total in the three-year history of the survey.
“The survey confirms what we have been hearing from homebuilders and remodelers for the past several months,” said Robert Filka, HBA Michigan CEO. “There has been considerable pent up demand among consumers as they have waited for market conditions to improve. Many potential buyers recognize that now is a perfect time for them to enter the market.”
The latest Michigan Housing Index covers the time period of January through March 2013. The first quarter 2013 index for builders was 59, which was up sharply from 38 in December of 2012, and 44 recorded in March 2012. Following is a year-to-year comparison of the MHI Index:
March 2013: Builders Index 59; Remodelers Index 58.
December 2012: Builders index 38; Remodelers Index 38.
March 2012: Builders Index 44; Remodelers Index 45.
The Michigan Housing Index is a quarterly summary of building and remodeling activity compiled by HBA of Michigan. The survey asks builders about the number of homes currently under construction and in the planning stages. Builders are also asked to evaluate their prospects for future customers. Totals are calculated in an index that is reported quarterly to provide a tracking mechanism for the industry’s process. The survey breaks down builder/ remodeler sentiment into three categories:
-Less than 45 (pessimistic)
-45-55 (cautious optimism)
-Above 55 (optimism)
“It is significant to note that the Michigan Housing Index total for the first quarter shows that builders and remodelers have for the first time in the history of the survey moved into the solidly optimistic category,” said Filka. “There is still a long ways to go before we can say that housing is all the way back, but the trend lines are certainly encouraging.”
A noteworthy trend in the MHI survey for the first quarter was the growing amount of interest that builders are experiencing among consumers purchasing more expensive homes, particularly in the $200,000 - $500,000 category. There has also been a modest uptick in consumer’s interest for homes in the $500,000- $800,000 category.
“During the economic downtown, most of the homes that did sell were under $200,000,” said Filka. “The fact that more homebuyers are now looking at higher priced homes is another indicator of a recovering housing market.”
The Michigan Housing Index combines results of a monthly survey of Michigan builders and remodelers along with a series of economic statistics including single family home permits, crude oil prices, automobile production and unemployment. The HBA Michigan Housing Index is intended to provide an accurate projection of the future direction of the building and remodeling housing market in Michigan.
The Home Builders Association of Michigan is a professional trade association comprised of 27 local homebuilder associations around the state and their builder, subcontractor and supplier members. HBAM works to positively promote the building industry and impact legislative, regulatory and legal issues affecting housing affordability.