Builder Confidence Rises One Point in JuneJune 18th, 2012 by DWM Magazine
Builder confidence in the market for newly built, single-family homes gained one point in June from a slightly revised level in the previous month to rest at 29 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This is the highest level the index has attained since May of 2007, reported the NAHB.
“This month’s modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates,” says Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Fla.
“While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain,” adds NAHB chief economist David Crowe. “In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time.”
In June, the HMI component measuring current sales conditions rose two points to 32, which is its highest level since April of 2007. Meanwhile, the components measuring sales expectations in the next six months and traffic of prospective buyers held unchanged at 34 and 23, respectively.
Regionally, the HMI results were mixed in June, with two areas of the country posting gains and two posting declines. The Midwest registered a five-point gain to 31 and the West registered a four-point gain to 33, while the Northeast and South each posted two-point declines, to 29 and 26, respectively.