Search

Home Construction Market Faces All Sorts of Headwinds: NAHB

by devteam June 17th, 2011 | Share

The National Association of Homebuilders (NAHB) today reported</a that its Housing Market Index (HMI) fellrnto 13 after standing at 16 for six out of the last 7 months seven months. rnThe HMI is a measure of builder confidence gleaned from homebuilders' responsesrnto a monthly survey that has been conducted by NAHB for over 20 years.</p

 “Builders are being squeezed by the continuing weakness inrnexisting-home prices – against which they must compete — as well as risingrnmaterial costs,” said NAHB Chairman Bob Nielsen, a home builder from Reno,rnNevada. “In addition to the ongoing impacts of distressed property sales onrnhome prices, appraisal values and consumer confidence, rising costs forrnmaterials such as roofing, copper, wallboard, vinyl siding and other componentsrnhave made it extremely difficult to construct a new home and sell it at a pricernthat covers the costs.”</p

</p

The NAHB/Wells Fargo survey asks homebuilders to gauge both currentrnsingle-family home sales and their expectations for those sales over the next sixrnmonths as “good,” “fair,” or “poor.”  Theyrnare also asked to rate current traffic of perspective buyers as “high tornvery high,” “average” or “low to very low.” Inrnaddition to the composit HMI, a component index is constructed for each of thernthree sets of responses.  A score over 50 on any index indicates that morernbuilders view sales conditions as good rather than as poor.  The index hasrnnot had a score over 50 since late in 2006.</p

Every component of the HMI fell in June. rnThe component measuring buyer traffic decreased 2 points to 12 afterrnlast month’s reading of 14 was the highest since May 2010.  Current Sales Conditions also fell 2 points,rnbringing that component of the index to 13.  Sales Expectations fell fromrn19 to 15, matching record lows from February and March of 2009.  </p

“Builder confidence has waned even further as economic growth hasrnstalled, foreclosures have continued to hit the market and the cost of buildingrna home has risen,” agreed NAHB Chief Economist David Crowe.rn”Meanwhile, potential new-home buyers are being constrained by difficultyrnselling their existing homes, stringent lending requirements, and generalrnuncertainty about the economy. Economic growth must pick up in order forrnhousing to gain the momentum it needs to get back on track.”</p

Regionally, the HMI results were mixed, with the Northeast actually rising 2rnpoints while the West represented the other end of the spectrum, falling 4rnpoints.  The midwest and south dropped 3rnand 2 points respectively.   

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

Comments

Leave a Comment

Leave a Reply

Latest Articles

Real Estate Investors Skip Paying Loans While Raising Billions

By John Gittelsohn August 24, 2020, 4:00 AM PDT Some of the largest real estate investors are walking away from Read More...

Late-Stage Delinquencies are Surging

Aug 21 2020, 11:59AM Like the report from Black Knight earlier today, the second quarter National Delinquency Survey from the Read More...

Published by the Federal Reserve Bank of San Francisco

It was recently published by the Federal Reserve Bank of San Francisco, which is about as official as you can Read More...