Builders Find Confidence in Cooler Housing Market
Conditions in the nation’s single-family housing market have remained unchanged in February, according to the NAHB/Wells Fargo Housing Market Index, which registered 57 for the third consecutive month.
“After several record-breaking years for home sales, builders are anticipating a return of the market to a healthy and steady pace,” said NAHB President David Pressly.
Any number above 50 on the index indicates that more builders view conditions as good than poor in their markets.
“This is definitely a good sign that the housing market is stabilizing,” agreed NAHB Chief Economist David Seiders. “The HMI fell significantly during the second half of 2005 as eroding affordability conditions affected home sales and builder sentiment, and the recent stabilization is consistent with the orderly cooling-down process that NAHB has been forecasting.”
Seiders, however, noted some significant regional variations in builder perceptions of housing market conditions. “In particular,” he said, “responses from builders in the West reflected much improved weather conditions in that region, accounting for a significant rebound in the area’s HMI score. By contrast, the Midwest, with its poorly performing job market, showed some further erosion in its HMI score as local builders lowered their expectations even further.”
Derived from a monthly survey that NAHB has been conducting for almost 20 years, the index gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers.
The HMI component measuring current market conditions was unchanged this month from January’s favorable score of 62. Sales expectations for the next six months and prospective home buyer traffic each declined one point, to 65 and 40, respectively.
Regionally, the HMI rose seven points to 74 in the West and one point to 57 in the Northeast. The index dropped two points to 64 in the South and three points to 33 in the Midwest.
Where Are the Top 100 Metropolitan Areas for 2006?
“HousingEconomics Online,” the online publication from the NAHB Economics Group, is your single source for market analysis, forecasts, housing statistics and more. In-depth analysis, detailed Excel tables and overviews are available for all metro forecasts.
To learn more or subscribe to “HousingEconomics Online”, visit www.housingeconomics.com.
Give Your Perspective on the New NAHB Economics Blog
Give your economic perspective on NAHB's new economics blog, “Seiders on Housing,” an informal Internet-based discussion forum dealing with topical economic issues, housing trends, survey research and other topics affecting the housing sector of the economy.
Log onto the blog at http://nahbblog.blogs.com and get direct access to NAHB Chief Economist David Seiders' expert opinions, projections and responses.
Attend the Spring Construction Forecast Conference in April
Plan to attend NAHB's Spring Construction Forecast Conference on April 27 at the National Housing Center in Washington, D.C. The conference brings together the nation's premier housing economists and finance experts for an in-depth look at the economic outlook for the housing industry.
For information or to register, visit www.nahb.org/cfc.