Fragile Economy Puts Builders in Subdued Mood in June
Indicating that single-family home builders remain cautious and concerned about the fragile state of today’s economy and housing market, the NAHB /Wells Fargo Housing Market Index (HMI) for this month declined one point to 15.
“The outlook for home sales has improved somewhat in recent months, due largely to implementation of the first-time home buyer tax credit and gains in housing affordability,” said NAHB Chairman Joe Robson. “However, looking forward, home builders are facing a few headwinds — including expiration of the tax credit at the end of November, a recent upturn in interest rates and especially the continuing lack of credit for housing production loans.”
“As expected, the housing market continues to bump along trying to find a bottom,” said NAHB Chief Economist David Crowe. “Meanwhile, builders are taking their cue from consumers, who remain uncertain about the economy and their own situation. Builders are also finding it difficult to complete a sale because customers cannot sell their existing homes.”
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the 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 conditions as good than poor.
Two out of three of the HMI’s component indexes were unchanged in June, including the index gauging current home sales, which held at 14, and the index on the traffic of prospective buyers, which held at 13. Meanwhile, the index gauging expectations for the next six months declined a single point, to 26.
Regionally, the decline was entirely focused in the South, the nation’s largest housing market, where the index dropped three points to 15. The other three regions of the country showed improvement, with gains of one point to 20 in the Northeast, one point to 15 in the Midwest and two points to 14 in the West.
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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