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No Spring Breakout as Builder Confidence Stalls

by devteam April 15th, 2014 | Share

The National Association of HomernBuilders (NAHB)/Wells Fargo Housing Market Index (HMI) rose to 47 this month,rnindicating a slight improvement in the confidence of home builders in thernmarket for new single family homes.  Atrnthe same time the March HMI was revised down to 46 from 47.    </p

NAHB constructs the HMI from results ofrna survey it conducts monthly among its homebuilder-members.  Respondents are asked to give theirrnperceptions of current single-family home sales and expectations for thosernsales over the next six months as “good,” “fair” orrn”poor.” The survey also asks builders to rate traffic of prospectivernbuyers as “high to very high,” “average” or “low tornvery low.”   Each set of responsesrnas well as the composite are used to calculate seasonally adjusted indicesrnwhere any number over 50 indicates that more builders view conditions as goodrnthan poor.  </p

NAHB said a Reuters’ poll of economistsrnhad predicted the HMI would rebound to 50 this month but it remains below thatrnbenchmark level through the third consecutive survey.  The HMI had recovered to a post-housingrncrisis high of 58 late last summer.</p

“Builder confidence has been in a holding pattern thernpast three months,” said NAHB Chairman Kevin Kelly. “Looking ahead,rnas the spring home buying season gets into full swing and demand increases,rnbuilders are expecting sales prospects to improve in the months ahead.”</p

Therncomponent measuring current single family sales was unchanged at 51 from the Marchrnnumber after it was revised down from 52. rnSales expectations over the next six months jumped to 57 from 52,rnreaching a three month high.  Prospectivernbuyer traffic was unchanged at 32 after the previous figure was revised lowerrnby one point.</p

“Headwinds that are holding uprna more robust recovery include ongoing tight credit conditions for home buyersrnand the fact that builders in many markets are facing a limited availability ofrnlots and labor,” NAHB Chief Economist David Crowe said.</p

The three-month moving average forrnthe HMI was down in all four regions from respective revised March numbers.  In the Northeast the composite fell from 35rnto 33.  In the Midwest the number wentrnfrom 53 to 49; the South dropped 2 points to 47 and the West went from 60 torn51.   </p

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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