NAHB report: Builder confidence holds steady in AugustMortgagePress.comNAHB, home builders, National Association of Home Builders/Wells Fargo Housing Market Index, HMI, Housing and Economic Recovery Act of 2008
Anticipating positive impacts of newly enacted housing stimulus
legislation, single-family home builders registered some
improvement in their outlook for home sales in the next six months,
according to the National Association of Home Builders/Wells Fargo
Housing Market Index (HMI) for August. The overall confidence
measure held even this month at 16, while the component gauging
sales expectations rose two points to 25.
"With the passage of crucial housing legislation last month that
created an attractive home buyer tax credit, there is a sense that
home sales may soon be reaching a turning point," noted NAHB
President Sandy Dunn, a home builder from Point Pleasant, W. Va.
"Builders are anticipating the stimulative effects of this
legislation and are optimistic that the tax credit will give those
buyers who've been sitting on the fence the reason they need to
jump back into the market."
The Housing and Economic Recovery Act of 2008, signed into law
by President Bush on July 30, implemented several critical reforms
to the housing finance system, provided aid to troubled homeowners
facing foreclosure, and created a temporary $7,500 tax credit for
first-time home buyers who meet certain income requirements. NAHB
has developed a Web site at www.federalhousingtaxcredit.com
to promote the tax credit and answer commonly asked questions about
it.
"While our overall measure of builder confidence remains at a
record low at this time, it is a good sign that two out of three of
the HMI's component indexes rose in August, and this may be an
indication that we are nearing the bottom of the long downswing in
new-home sales," said NAHB Chief Economist David Seiders. "Our
current forecast shows stabilization of sales during the second
half of this year, followed by solid recovery in 2009 and
beyond."
Derived from a monthly survey that NAHB has been conducting for
more than 20 years, the NAHB/Wells Fargo HMI gauges builder
perceptions of current single-family home sales and sales
expectations for the next six months as "good," "fair" or "poor."
The survey also asks builders to rate traffic of prospective buyers
as "high to very high," "average" or "low to very low." Scores for
each component are then used to calculate a seasonally adjusted
index where any number over 50 indicates that more builders view
sales conditions as good than poor.
Two out of three of the HMI's component indexes posted gains in
August, including a one-point rise in the index gauging current
sales conditions, to 16, and a two-point uptick in the index
gauging sales expectations for the next six months, to 25. The
component gauging traffic of prospective buyers remained unchanged,
at 12.
Regionally, the Northeast and Midwest each posted gains in
builder confidence, with the Northeast up two points to 16 and the
Midwest up four points to 14. Meanwhile, the South remained
unchanged at 20, and the West, whose new-homes market has been
heavily impacted by an upswing in foreclosure sales at cut-rate
prices, posted a decline of three points to 11.
For more information, visit www.nahb.org/hmi.
