Homebuilders Still Hampered by Appraisal Inaccuracies and Lack of Financing Options

Thernnation’s homebuilders are still seeing a lot of dark tunnel ahead judging by theirrnresponses in the most recent survey of attitudes about the home sales marketrnconducted by the National Association of Homebuilders (NAHB).   According to results of the survey the NAHB/WellsrnFargo Housing Market Index (HMI) released Tuesday remained stuck at 16 for thernfourth consecutive month.</p

Thernsurvey, which has been conducted for over 20 years, measures the confidence ofrnhomebuilders using three criteria; builder expectations of current single-family home sales and their expectationsrnfor sales over the next six months, each measured as “good,”rn”fair” or “poor;” and their  perceptions of prospective buyer traffic asrn”high to very high,” “average” or “low to veryrnlow.” Scores from each component are then used to calculate a seasonallyrnadjusted index where any number over 50 indicates that more builders view salesrnconditions as good than poor.  The HMIrnhas not topped 50rnsince late in 2006.</p

Two ofrnthe component indexes did increase slightly this month.  Perceptions of current sales conditions rosernfrom 15 to 17 and the component gauging sales expectations over the next sixrnmonths rose one point to 25.  The thirdrncomponent, level of current traffic, remained unchanged at 12.</p

On a regional basis, HMI scores were mixed in February. The Northeastrnregistered a two point gain to 22; the South went up one point to 18, the otherrntwo regions declined; the Midwest one point to 12 and the West two points torn13.</p

NAHB Chairman Bob Nielsen blamed the lack of confidence on a tightrnlending environment making it difficult for builders to obtain credit for newrnand existing projects combined with a mixture of other market issues such asrninaccurate appraisals and the ongoing flood of foreclosures. </p

NAHB Chief Economist David Crowe echoed Nielsen on the problem of tightrncredit to builders and added, “Builders are telling us that some pocketsrnof optimism have begun to emerge, but many prospective purchasers are concernedrnabout selling their existing home in the current market, or face difficultyrnsecuring credit for a home purchase — even when they are well-qualified.”rn</p

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