John Varano

Among the many barometers of housing-market health, one of the more significant indicators is new home construction. Especially in areas where there are more buyers than homes for sale, the number of new homes being built can make a difference in how quickly prices rise and how many choices buyers have to choose from. One way to gauge how well the new home market is doing is to look at the National Association of Home Builders' Housing Market Index. The Index – which measures builder confidence on a scale where any number above 50 indicates more builders view conditions as good than poor – is a monthly look at how builders feel about current and upcoming market conditions. According to the latest results, builder confidence has now risen to its second highest level since the housing crash, hitting 70 in May. Robert Dietz, NAHB's chief economist, says there is growing confidence in the market for new homes. “The HMI measure of future sales conditions reached its highest level since June 2005, a sign of growing consumer confidence in the new home market,” Dietz said. “Especially as existing home inventory remains tight, we can expect increased demand for new construction moving forward.”