Improved Traffic Raises Builders’ Hopes in February
Considerably improved traffic of prospective buyers through model homes nudged builder confidence in the market for new single-family homes marginally higher this month, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), which was released on Feb. 19.
The HMI for February rose a single point to 20, remaining close to its recent reading of 18, a historic low for the series since its start in January 1985.
"While builders remain very cautious about the outlook for new-home sales given today's economic environment, the fact that more consumers appear to be checking out their options is a good sign," said NAHB President Sandy Dunn.
"Housing has always been a major engine of economic growth, and despite the ongoing market correction, it will once again be that engine in the future,” Dunn said. “But in order for that to happen, Congress must follow up on its recently enacted economic stimulus program by passing legislation that will jump-start the housing market and keep the economy moving forward."
"Some potential buyers who have been sitting on the sidelines are starting to at least research a new home purchase, given improving affordability factors and the large selection of units on the market," said NAHB Chief Economist David Seiders. "That said, builders know there's a difference between people looking and people buying, and their current outlook remains quite subdued. Additional stimulative measures on the legislative and policy side are definitely needed to bolster consumer confidence and help bring about a housing and economic recovery."
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, sales expectations for the next six months and the traffic of prospective buyers. Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
In February, the index gauging current sales conditions for single-family homes rose one point to 20, while the index on sales expectations for the next six months declined one point to 27. The index on traffic of prospective buyers rose five points to 19, its highest level since last July.
The February HMI gained ground in three out of four regions, climbing three points to 24 in the Northeast, two points to 24 in the South and two points to 15 in the West. The index registered 16 in the Midwest, unchanged from the previous month.
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Free NAHB Kit Gives Builders Back-to-Basics Tips to Navigate the Slowdown
What was once expected to be a relatively mild housing slump following three years of record new home construction and sales has given way to a significant downturn.
To help members navigate the uncharted waters of this slowdown, NAHB has compiled a comprehensive “Back to Basics” online toolkit — the best of the basics, the tried and true and the truly new. To access the toolkit, click here.
To access the “Back to Basics” toolkit, you must be an NAHB member and have a login to www.nahb.org. To create a login, go to www.nahb.org/login or click on the log-in button on the main menu bar.
For assistance, call the NAHB Member Service Center at 800-368-5242.