Thanks for keeping your readership up-to-speed on the latest. It's difficult to track all of these market data points and your efforts at #d5R to keep us updated are incredibly timely and helpful.
I know the home construction market has been historically dismal but my sense is that a bottom may have been reached. The ride back up will undoubtedly be long and bumpy but many indicators suggest that we're at the beginnings of an upward trend. Keeping my fingers and toes crossed.
Three Cases for Optimism
Yesterday brought at least three upbeat economic indicators for the construction industry. Today will probably bring at least three downer indicators, so enjoy the good news while you can.
NAHB/Wells Fargo Housing Market Index hits highest reading since June 2007
The monthly survey asks builders about perceptions of single-family home sales and their business expectations for the next six months. From NAHB's Eye on Housing blog:
"This marks the fourth consecutive monthly increase for a total change of 11 points and the largest four month increase since 2003. All three components increased and all four regions showed positive change. Except for the Northeast, regional levels were last this high in 2007 and current sales and traffic are back to levels last seen in 2007. Expectations for future sales were the highest since mid-2009. "
Not that this is any cause for irrational exuberance. The index is still at a dismal 25, on a scale of 0 to 100. More on the latest HMI here.
AIA Architecture Billings Index remains in positive territory
For the second straight month, the Architecture Billings Index remained at 52 in December, up from 49.4 in October and way up from 45.3 in February of 2010. Any score above 50 indicates a rise in billings for design services, while scores below 50 indicate a decline in billings.
The ABI reflects a typical nine to 12-month lag time between design billings and construction spending, and is considered a leading indicator of construction activity.
Regionally, conditions are strongest in the South, followed by Midwest, Northeast and West.
"[T]his is very good news for the design and construction industry and it's entirely possible conditions will slowly continue to improve as the year progresses," said AIA chief economist Kermit Baker in a press release.
Mortgage applications spike again, driven mainly by refinancing
With mortgage rates hovering at all-time loans, the volume of mortgage applications rose 23 percent last week. More than 80 percent of that activity was for refinancing, indicating that growing numbers of people are commiting to staying in their homes and, presumably over the long haul, remodeling them as well.
See the latest survey data at the Mortgage Bankers Association.
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