Builder Confidence Continued to Sag in Early November
Surveyed in November for the NAHB/Wells Fargo Housing Market Index (HMI) prior to enactment of an extension and expansion of the home buyer tax credit, single-family home builders remained guarded in their assessment of the marketplace. The index showed builder confidence last month unchanged from October’s low level, with the overall HMI holding flat at 17 and the component gauging sales expectations for the next six months rising two points to 28.
"When the HMI survey was conducted at the beginning of last month, home builders were facing the imminent expiration of the $8,000 first-time home buyer tax credit at the end of November, with no guarantee that this valuable buyer incentive would be extended," said NAHB Chairman Joe Robson. "Now that Congress has done its job by both extending the tax credit into next year and expanding eligibility for it among potential buyers, we are very hopeful that this will have the intended stimulative effect on sales activity going forward."
"November’s report confirmed that home builders and buyers were in something of a holding pattern early in the month as the anticipated expiration of the tax credit drew near and congressional action had not yet taken place to address this," confirmed NAHB Chief Economist David Crowe. "Meanwhile, the challenges that builders are facing in obtaining credit for new housing production and appropriate appraisal values for their homes continued to worsen. These issues still present a very worrisome problem that is weighing down prospects for a sustained housing market recovery."
In a special questions section of the HMI survey, fully one-third of the respondents indicated that they had recently lost sales due to low appraisal values, up from 25% in a survey conducted in July. Builders reported that low appraisal values are often tied to the use of foreclosed and distressed properties as "comps" in the appraisal process.
Derived from a monthly survey that NAHB has been conducting for nearly 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 sales conditions as good than poor.
In the November index, the components gauging current sales conditions and the traffic of prospective buyers remained unchanged, at 17 and 13, respectively.
On a regional basis, HMI results were somewhat mixed in November. The South recorded no change, at 17, while the Midwest posted a three-point decline to 14, the Northeast registered a six-point decline to 19 and the West bounced back five points from a big dip in October to finish at 19.
Web Site One-Stop Shop for Tax Credit Info
Builders and other industry professionals can help spur home sales by referring prospective home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on both the extended $8,000 first-time home buyer tax credit and the new $6,500 repeat buyer tax credit recently signed into law by President Obama.
Consumers can use the Web site to find information on both tax credits — including frequently asked questions and links to social media sites that provide updated information as it becomes available. It also includes a number of home-buying resources for consumers.
Industry professionals are encouraged to highlight the tax credit Web site when marketing to their potential home buyer market.
Webcast of Fall Construction Forecast Conference Now Available
An on-demand webcast of the 2009 Fall Construction Forecast Conference held at the National Housing Center in Washington, D.C., on Oct. 21 is now available for purchase.
The webcast fee includes access to the webcast archive and electronic copies of the conference handout and presentation materials. Multiple viewers in one office can purchase the webcast for one fee.
The on-demand webcast also gives viewers complete flexibility in their viewing experience — pause, skip forward and backward, or jump directly to your topics of interest. The webcast is available for $250.
To view the webcast schedule, topics of discussion and a list of the presenters, click here.
To purchase and download the webcast, click here.
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