Builders Blame Congress For Home-Buying Headwinds

Builder confidence in the market forrnnewly constructed homes remains only moderately positive according to the NationalrnAssociation of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI)rnreleased today.  The HPI registered at 54rnin November, unchanged from a downwardly revised October reading.   It wasrnthe sixth consecutive month that more builders have viewed market conditions asrngood than poor but over that time the HPI has not moved significantly above thernpositive/negative dividing line.</p

The index is derived from a survey conducted by NAHB among its single-familyrnresidential builders.  They are asked torngauge current home sales and their expectations for sales over the next 12rnmonths as “good,” “fair,” or “poor” and the rate the current traffic ofrnprospective buyers from low to very high. rnScores from each component are then used to calculate a seasonallyrnadjusted index where any number over 50 indicates that more builders viewrnconditions as good than poor.</p

The index component measuring current sales conditions was also unchanged,rnremaining at 58, while the component measuring builders’ six month expectationsrnfell from 61 to 60.  The componentrngauging current buyer traffic dropped one point to 41.</p

“Given the current interest rate and pricing environment, consumers continuernto show interest in purchasing new homes, but are holding back because Congressrnkeeps pushing critical decisions on budget, tax and government spending issuesrndown the road,” said NAHB Chairman Rick Judson. “Meanwhile, builders continuernto face challenges related to rising construction costs and low appraisals.”<br /<br /"Policy and economic uncertainty is undermining consumer confidence," said NAHBrnChief Economist David Crowe. "The fact that builder confidence remains above 50rnis an encouraging sign, considering the unresolved debt and federal budgetrnissues cause builders and consumers to remain on the sideline."<br /<br /The HMI three-month moving average was mixed in the four regions. No movementrnwas recorded in the South or West, which held unchanged at 56 and 60,rnrespectively. The Northeast recorded a one-point gain to 39 and the Midwestrnfell three points to 60.

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