Remodelers Attitudes more Bullish than Home Builders

The National Association of Home Builders’ (NAHB’) monthlyrnassessment of builder confidence in the new home market showed a slightrnweakening in January.  The Association’srnHousing Market Index (HMI) which it sponsors in conjunction with Wells FargornBank, was at 57, down one point from December. rnNAHB pointed out it was the third straight month the Index has “hovered”rnin the upper 50’s ranger.  </p

“After seven months above the key 50 benchmark, builder sentiment isrnreflecting the gradual improvement that is occurring in many markets throughoutrnthe nation,” said NAHB Chairman Kevin Kelly. <br /<br /"January's HMI reading is in line with our forecast as we head into the newrnyear," said NAHB Chief Economist David Crowe. "Steady economic growth, risingrnconsumer confidence and a growing labor market will help the housing marketrncontinue to move forward in 2015." </p

The index is based on responses to a monthly survey which NAHB has conductedrnfor 30 years.  New home builders arernasked to describe both current single-family home sales and their expectationrnfor sales over the next six month as “good,” “fair” or “poor” and to gaugerncurrent traffic of prospective buyers as “high to very high,” “average” or “lowrnto very low.” Scores from each component are then used to calculate arnseasonally adjusted index where any number over 50 indicates that more buildersrnview conditions as good than poor.</p

Builder expectations for future sales typically receive the highest score ofrnthe three components but this month slipped four points to 60.  The index measuring perceptions of therncurrent market remained unchanged at 62 and the component measuring buyerrntraffic fell from 46 in December to 44.  </p

Looking at the three-month moving averages for regional HMI scores, the Westrnrose by four points to 66, the Midwest registered a three-point gain to 57 andrnthe Northeast was up two points to 47. The South dropped two points to 58.<br /<br /NAHB earlier released its Remodeling Market Index (RMI) based on a similar surveyrnconducted quarterly among its members specializing in home remodeling regardingrntheir perceptions of both current and future market conditions.  The current market index increased from 57 inrnthe third quarter to 60 in the fourth.  Inrnassessing current market conditions buildings are asked to consider work inrnfour areas, large additions, small remodels, maintenance, and repair.  All four subcomponents increased compared tornthe third quarter.</p

The RMI’s future market conditions index rose to 60 from 58 in the previousrnquarter. All four of its subcomponents-calls for bids, amount of work committedrnfor the next three months, backlog of jobs and appointments forrnproposals-increased from the previous quarter’s reading.</p

“Even with some weakness in existing homes sales and house prices earlier inrnthe year, remodelers are upbeat as 2014 closes,” Crowe said. “The consistentrnimprovement in RMI results throughout 2014 are a sign of the gradual recoveryrnof the remodeling market.”

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