John Varano

When builders feel confident that there are a lot of buyers looking for new homes, they build more homes. It's simple, really. It's also good for the housing market, as more new homes help provide choices and keep prices from spiking. That's why the National Association of Home Builders tracks builder confidence each month. In October, their survey found builders optimistic about the market for newly-built homes and confident that buyer demand will remain high. “Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” Randy Noel, NAHB's chairman, said. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.” Among the survey's three components – scored on a scale where any number above 50 indicates more builders view conditions as good than poor – current sales conditions rose a point to 74 and expectations for the next six months increased to 75. The results are an encouraging sign that new home inventory will improve and help bring more balance to the market, which is good news for buyers.