Home Builder Outlook Improves Before Spring Buying Season

For thernfirst time in four months builders showed increased confidence in theirrnresponses to the National Association of Home Builders (NAHB)/Wells FargornHousing Market Survey. The HousingrnMarket Index (HMI) derived from that survey bumped up one point from its previouslyrnstatic position to 17 in March.   </p

ThernSurvey, which NAHB has conducted for over 20 years, asks builders to raterncurrent single-family homes sales and their expectations for those sales in 6rnmonths, both on a scale of “good,” “fair,” orrn”poor,” and the traffic of prospective buyers as “high to veryrnhigh,” “average” or “low to very low.”  Each question results in a component score andrnthe three components are used to calculate a seasonally adjusted index – the HMIrn- where any number over 50 indicates that more builders view sales conditionsrnas good than poor.</p

This isrnthe highest score for the HMI since May 2010, a time when builders were feelingrnthe effects of the home buyer tax credit program. </p

</p

The componentrngauging current sales conditions scored 17, unchanged from the previous monthrnand the index measuring traffic of prospective buyers was 12, also unchanged. Builders,rnhowever, expressed optimism about sales in the next six months, driving thatrncomponent to 27, the highest level since May 2010 and two points higher thanrnthe February figure. </p

“While many home buyers are still holding off on making a purchase,rnbuilders did indicate slightly increased optimism about the future with arntwo-point gain in the HMI component gauging sales expectations for the next sixrnmonths,” said NAHB Chief Economist David Crowe. “In fact, prevailingrnindicators portend some improvement in the overall economy, which shouldrngenerate modest housing market gains later this year.” But, he added,rn”Unfortunately, most small builders report that they are no more able tornobtain credit for new construction today than they have been in the past year,rnand this is a major impediment that is keeping them from putting their crewsrnback to work.”</p

Regionally, HMI results were mixed in March. While the Northeast posted arnone-point decline to 20, the Midwest held flat at 12, the South gained twornpoints to 20 and the West gained four points to 17.

All Content Copyright © 2003 – 2009 Brown House Media, Inc. All Rights Reserved.nReproduction in any form without permission of MortgageNewsDaily.com is prohibited.