Builder Confidence at a Record-Low Ebb in January
A faltering economy and reluctant home buyers pushed builder confidence in the market for newly built single-family homes down one point to a record low of 8 in January, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), which was released on Jan. 21.
"Clearly, conditions in the nation's housing market aren't getting any better, and they aren't going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market," said 2008 NAHB Chairman Sandy Dunn. Speaking from the International Builders' Show in Las Vegas, Dunn noted that "the Obama Administration and the new Congress have a tremendous opportunity and responsibility to enact legislation that can spur home buyer demand and jump-start the national economy."
"Builder views continue to track with historically low consumer confidence measures," said NAHB Chief Economist David Crowe. "The fact that there has been microscopic movement in the historically low HMI and its component indexes over the last three months provides further evidence of the need for government action to rejuvenate housing demand. Qualified buyers are clearly in the wings, but they're looking for a significant signal from the federal government that now is the time to return to the market."
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. Any number over 50 indicates that more builders view sales conditions as good than poor.
All of the HMI's component indexes remained at or near historic lows in January. The index gauging current sales conditions showed the greatest change, slipping two points to a lowly 6. The indexes gauging sales expectations for the next six months and traffic of prospective buyers each rose a single point, to 17 and 8, respectively.
Regionally, January’s HMI fell one point to 10 in the Northeast, held even at 6 in the Midwest, rose one point to 11 in the South and fell three points to a new record low of 4 in the West.
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.