Headline Explained: The Housing Market is Back! Sorta…

Most market news you find on the internet has a knack for making finance topics very confusing. We’ve decided to take articles, strip away the jargon, and break them down for you in simple terms. The way it should be…

Home Builder Confidence Soars to 7-Year High – CNBC

When the housing bubble burst in 2006-08, the value of homes came tumbling down. This was because of a high supply of houses on the market, with no one to buy them. Obviously, this crisis hasn’t made housing the most favourable of markets among Americans.

This pessimism has been seen through The National Association of Homebuilders‘ Housing Market Index. This index measures the confidence of homebuilders towards the future of new home construction. That is, as the demand for new homes grows, so does the home construction industry.

A score of 50 or less means that more builders view market conditions as poor rather than favorable. These scores are what we’ve seen since 2006, reaching a low of less than 10 in 2009. This means that, in 2009, over 90% of homebuilders had a negative sentiment towards the market. Well, that’s understandable.

In this month’s index, however, we are finally seeing signs of a turn around in the housing market. For the first time since 2006, the index hit a score greater than 50…52 to be exact. Do you think these index results represent a real move towards progress in the housing market?

Tell us why you think so in the comment section below!

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