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Builder
Confidence Jumps
12 points, Expectations
Reach New Highs
Kansas City metro area home builders showed increased confidence in the ongoing
health of the local home-building market during January’s Housing Market
Index (HMI) survey. The index reading for single-family detached builders, the
primary index reading, came in at 59, a 12-point jump from December’s level.
The January HMI was the highest reading since August. |
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March
HMI Reports |
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Full
March Report
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The
current conditions component
of the index, the most
heavily weighted component,
came in at 62, up 10
points from December
and only
four points off its
all-time high. The second
largest
component of the HMI,
the expected conditions
reading,
came in at 84. The January
reading was up 11 points
from December and marked
the highest reading
ever recorded by the
HMI. The
prospect of low interest
rates and an improving
economy combined with
strong sales levels appear
to
be propelling confidence
in 2004’s
home-building market.
The
traffic reading, the last
and smallest component
of the HMI, came in
at 41 this month, up 16
points
from December’s
all-time low reading of
25. Although below the
index’s
neutral level of 50, the
traffic reading has not
moved above 41 since September
and is likely more a seasonal
reflection than a genuine
indication of poor quality
traffic. Written responses
from survey participants
suggest encouraging views
regarding both the level
and quality of traffic.
Builders
in the single-family attached
market reported similar
sentiments as detached
builders. The index for
attached product was up
nine points to 56. The
attached market has been
lagging the detached market
for several months. The
January reading, however,
was at its highest level
since August. Current
conditions were up four
points to
58 and expected conditions
bolted up 17 points to
75. The outlook for attached
home sales has not seen
levels this optimistic
since the July reading
of 76.
The
future does look quite
as bright in the eyes
of builders in multi-family
markets. That index
was
up four points to 48 but
still well below the other
markets. Current conditions
remained flat, while
expected
conditions actually fell
six points. In fact, the
only reason the index
moved
up was that the traffic
reading moved up to
41
from 25. The traffic reading,
though, reflects all markets
and is not measured on
a market-by-market basis.
When
evaluating all markets
combined in the metro,
the HMI reading jumped
a solid 11 points.
Current
conditions came in
at 60, and expected
conditions
at 79. This 10-point
leap
in expectations for
building
market conditions is at
its highest level since
the Kansas City HMI
was
begun last spring and
is
supported by the
record
number of permits issued
in 2003.
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