For Immediate Release
CONTACT: Paul Lopez
BUILDER CONFIDENCE DECLINES IN AUGUST
WASHINGTON, Aug. 16 – Builder confidence in the market for newly built,
single-family homes edged down for a third consecutive month in August,
according to the latest National Association of Home Builders/Wells Fargo
Housing Market Index (HMI), released today. The HMI declined one point to
13, its lowest level since March of 2009.
“Builders are expressing the same concerns that they are hearing from
consumers right now, particularly the sense that the overall economy and job
market aren’t gaining any traction,” said NAHB Chairman Bob Jones, a home
builder from Bloomfield Hills, Mich. “Meanwhile, many continue to report
that problems with inaccurate appraisals, competition from the large number
of distressed properties on the market, and tight consumer lending
conditions are causing them to lose potential sales.”
“Today’s report reflects single-family home builders’ concerns about current
and future economic conditions and about the increasing hesitancy they are
seeing among potential home buyers,” added NAHB Chief Economist David Crowe.
“It also reflects the frustration that builders are feeling regarding the
effects that foreclosed property sales are having on the new-homes market,
with 87 percent of respondents reporting that their market has been
negatively impacted by foreclosures.” Even so, he noted, NAHB continues to
project that modest job gains, historically low mortgage rates and pent-up
demand will ensure a better housing market in the second half of 2010 than
in the first half.
Derived from a monthly survey that NAHB has been conducting for more than 20
years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions
of current single-family home sales and sales expectations for 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 from 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.
Two out of three of the HMI’s component indexes fell in August. The
component gauging current sales conditions declined one point to 14, while
the component gauging sales expectations for the next six months declined
three points to 18. The component gauging traffic of prospective buyers held
unchanged at 10.
Meanwhile, three out of four regions posted HMI declines in August. A
six-point decline to 18 in the Northeast partially offset a big gain in that
region in the previous month, while the South and West each posted one-point
declines to 13 and 8, respectively. The HMI for the Midwest held even at 15
Please visit www.nahb.org/hmi for tables, historic data and details.