NAHB: Home Builder Confidence Declines

Posted by Orb Staff on July 19, 2010 No Comments
Categories : Residential Mortgage

r confidence in the market for newly built, single-family homes declined for a second consecutive month in July to its lowest level since April 2009, according to the [link=http://www.nahb.org/news_details.aspx?sectionID=134&newsID=11078]newly released[/link] National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI fell two points from a downwardly revised number in the previous month to 14 for July. Each of the HMI's component indexes recorded declines in July. The component gauging current sales conditions fell two points to 15, while the component gauging sales expectations in the next six months edged down one point to 21 and the component gauging traffic of prospective buyers fell three points to 10. Regionally, the HMI results were mixed in July. The Northeast, which has a smaller survey sample and therefore is prone to greater monthly volatility, posted a seven-point increase to 23 this month, while the Midwest posted a one-point improvement to 15. The South and West each posted five-point declines to 14 and 9, respectively. ‘This month's lower HMI reflects a number of underlying market conditions that builders are seeing, including hesitant home buyers, tight consumer credit, and continuing competition from foreclosed and distressed properties that are priced below the cost of construction,’ says NAHB Chief Economist David Crowe. ‘The pause in sales following expiration of the home buyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy. ‘ However, Crowe added that the picture is not entirely gloomy. ‘We do believe that favorable factors such as low mortgage rates, affordable prices and demographic trends will help revive consumer demand for new homes this year, and that new-home sales will improve by 10 percent in 2010 from 2009,’ he said. SOURCE: National Association of Home Bui

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