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  • Home Builders' Rising Confidence

    There may be a lot of unsettled foreclosures, and a lot of homeowners under water, but one key group keeps feeling better and better about the housing market. Home builders. The NAHB/Wells Fargo Housing Market Index has reached its highest level in four years. The index is now at 29, up from 25 in January. That's the fifth consecutive month home builder confidence has risen, according to the National Association of Home Builders . From the NAHB release: “Builder confidence has doubled since September as measured by the HMI,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “Given the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth.” Rutenberg cautioned that the housing sector remains very fragile with significant differences between individual markets, and said policymakers must guard against actions that could impede or even reverse the gains of recent months. “This is the longest period of sustained improvement we have seen in the HMI since 2007, which is encouraging,” said NAHB Chief Economist David Crowe. “However, it is important to remember that the HMI is still very low, and several factors continue to constrain the market. Foreclosures are still competing with new home sales, and many builders are seeing appraisals come in at less than the cost of construction. Additionally, prospective home buyers are finding it difficult to qualify for a mortgage.” Read the full release here .
  • NAHB/Wells Fargo HMI Dips to 14

    Not that anybody is expecting new home sales to rebound in a significant way anytime soon, but the National Association of Home Builders had little positive news to report today upon release of monthly home builder confidence survey results. The NAHB/Wells Fargo Housing Market Index slid one point to 14. The index has been below 16 for the last 6 months. From the release: "Very little has changed in terms of housing market conditions so far this year," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit." "The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," added NAHB Chief Economist David Crowe. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market." Read the full release here .
  • Housing Starts are Down, but Builder Confidence is Up

    Housing starts dropped in March, according to figures just released by the US Census Bureau : Privately-owned housing starts in March were at a seasonally adjusted annual rate of 510,000. This is 10.8 percent (±11.6%)* below the revised February estimate of 572,000 and is 48.4 percent (±5.9%) below the March 2008 rate of 988,000. Single-family housing starts in March were at a rate of 358,000; this is unchanged (±16.2%)* from the revised February figure of 358,000. The March rate for units in buildings with five units or more was 116,000. Despite what was obviouslt a slow and trying month for their business, home builders are increasingly optimistic. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) --released a day before the Census Bureau figures--builder confidence rose to its highest level since October, 2008: Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations in the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. Each of the HMI’s component indexes recorded substantial gains in April. The largest of these gains was a 10-point surge in the component gauging builder sales expectations for the next six months, which brought that index to 25. The component gauging current sales conditions and the component gauging traffic of prospective buyers each rose five points, to 13 and 14, respectively. You can access detailed data on the HMI and builder confidence here . Read the Census Bureau report on March housing construction here .