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Builder confidence in the market for newly built, single-family homes rose three points to 16 on the NAHB/Wells Fargo Housing Market Index (HMI) for October, which was released on Oct. 18. This was the first improvement registered by the HMI in five months, and returns the index to a level last seen in June of this year.
"Builders are starting to see some flickers of interest among potential buyers, and are hopeful that this interest will translate to more sales in the coming months," said NAHB Chairman Bob Jones. "However, because most builders still have no access to credit for building homes, there is a real concern that we will not be able to meet the pent-up demand when consumers are ready to get back in the market. This problem threatens to severely slow the housing and economic recovery."
"The new-homes market is finally moving past the lull that occurred when the home buyer tax credits expired and economic growth stalled this summer," noted NAHB Chief Economist David Crowe. "While challenges such as competition from foreclosures, inaccurate appraisal values and general consumer uncertainty about the economy and job market continue to be major factors, builders have seen a slight increase in consumers who are considering a home purchase. The toughest obstacles really come down to financing — the scarcity of construction credit for builders along with tougher mortgage requirements for consumers."
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 sale, sales expectations for the next six months and the traffic of prospective buyers. 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.
All three of the HMI's component indexes registered gains in October. The index gauging current sales conditions rose three points to 16, sales expectations in the next six months rose five points to 23 and prospective buyer traffic climbed two points to 11.
Builder confidence also improved across every region in October. The South and West each posted four-point gains, to 18 and 12, respectively, while the Northeast and Midwest were each up by a single point, rising to 17 and 13, respectively.
The Fall Construction Forecast Conference (CFC) Webinar will feature three distinct perspectives on the housing industry and its near- and long-term future. The webinar will be held from 2:00-4:00 p.m. EDT on Wednesday, Oct. 27.
Speakers David Crowe, NAHB chief economist; Eric Belsky, managing director of Harvard University’s Joint Center For Housing Studies; and Maury Harris, managing director and chief U.S. economist at UBS, will present the latest economic data and opinions in a streamlined, efficient format that will enable attendees to interact directly with them.
The fee is $29.95 for NAHB members and home builders associations and $49.95 for non-members.
For more information and to register, visit www.nahb.org/cfc.
Housing and economics followers can get the latest economics and housing policy news, analysis, studies, charts and graphs from NAHB’s free new blog, “Eye on Housing,” at http://eyeonhousing.wordpress.com.
Featuring NAHB Chief Economist David Crowe, as well as observations and comments from NAHB economists Bernie Markstein, Paul Emrath, Robert Dietz, Peter Grist and Robert Denk, the blog also includes links to relevant housing stories and information from other news sources.
Blog entries will be updated on a regular basis as the news related to housing occurs. The blog also will replace the content in NAHB’s Eye on the Economy. While subscribers will still receive their regular issues of Eye on the Economy, the e-newsletter will serve primarily as a digest of the content featured on the "Eye on Housing" blog.
Readers can either visit the free blog directly at http://eyeonhousing.wordpress.com, or subscribe to the RSS feed on the blog to have the latest entries sent to them as they are posted.
Want to Know Your State’s Starts Forecast for 2010-2011?
Find out in HousingEconomic.com’s State Starts Forecast (sample).
The forecasts include downloadable Excel tables of total, single-family and multifamily starts by region and state.
To learn more, visit www.housingeconomics.com.