Homebuilder confidence in the South surged to an 8-month high in December, according to the latest National Association of Home Builders (NAHB) data.
- The index rose six points to 48, the region’s best showing since April, as builders in the South gained optimism heading into 2025.
Nationally, the confidence index held steady at 46, tied for the fourth-best month of the year. The Northeast showed the strongest improvement, rising to 62, its highest level since June.
- The Midwest remained flat at 48, while the West dipped to 38, signaling regional struggles with affordability and demand.
Mixed Data: The three components of the index were mixed: current single-family sales stayed at 48, while sales expectations for the next six months climbed to 66, the highest since April 2022.
- However, traffic of prospective buyers fell slightly to 31 as high mortgage rates continued to weigh on buyer demand.
What They’re Saying: NAHB Chief Economist Robert Dietz highlighted mortgage rate challenges heading into 2025. “NAHB is forecasting additional interest rate cuts from the Federal Reserve in 2025, but with inflation pressures still present, we have reduced that forecast from 100 basis points to 75 basis points. Concerns over inflation risks will keep mortgage rates above 6%.”
Bottom Line: Rising confidence in the South and Northeast signals improving conditions for builders, but lingering affordability issues and elevated mortgage rates will likely keep the housing market below pre-pandemic levels.
