Skip to main content

NAHB study concludes builder confidence declines in July

Jul 22, 2010

Builder confidence in the market for newly built, single-family homes declined for a second consecutive month in July to its lowest level since April of 2009, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI fell two points from a downwardly revised number in the previous month to 14 for July. "We continue to see a lull in home buying activity following the expiration of the federal home buyer tax credit program, as many of the sales that would have occurred this summer were likely pulled forward to meet that program's deadline," noted NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich. "In addition, builders are reporting continuing consumer hesitancy regarding home purchases due to uncertainty in the overall economy and job markets." "This month's lower HMI reflects a number of underlying market conditions that builders are seeing, including hesitant home buyers, tight consumer credit, and continuing competition from foreclosed and distressed properties that are priced below the cost of construction," said NAHB Chief Economist David Crowe. "The pause in sales following expiration of the homebuyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy. That said, we do believe that favorable factors such as low mortgage rates, affordable prices, and demographic trends will help revive consumer demand for new homes this year, and that new-home sales will improve by 10 percent in 2010 from 2009." Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index 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 conditions as good than poor. Each of the HMI's component indexes recorded declines in July. The component gauging current sales conditions fell two points to 15, while the component gauging sales expectations in the next six months edged down one point to 21 and the component gauging traffic of prospective buyers fell three points to 10. Regionally, the HMI results were mixed in July. The Northeast, which has a smaller survey sample and therefore is prone to greater monthly volatility, posted a seven-point increase to 23 this month, while the Midwest posted a one-point improvement to 15. The South and West each posted five-point declines to 14 and nine, respectively. For more information, visit www.housingeconomics.com.
About the author
Published
Jul 22, 2010
MBA Urges Shift To Single Credit Report Model, Citing Cost Savings And Efficiency

MBA says tri-merge credit checks cost lenders up to $100 per loan, doubling since pre-COVID, as industry pushes for a cheaper, single-report model

Jun 16, 2025
Fairway Acquires Hallmark Home Mortgage Through Asset Purchase

Hallmark to become new Fairway division, gets access to Fairway's Fairway's product portfolio, tech, and support resources

Jun 13, 2025
Trigger Leads Bill Clears Senate

Final push now left to House; reconciled bill needed next

Housing Market Outlook: Brighter Days To Come

NAR Chief Economist Yun calls lower mortgage rates ‘magic bullet’ to boost home sales

Jun 11, 2025
Redfin Shareholders Say Yes To Acquisition By Rocket

Nearly 99% of Redfin shareholders vote to approve merger, though fewer vote yes to compensation for company’s execs

Jun 10, 2025
Play Ball: Ishbias Could Add Another Team To Their Roster

Justin Ishbia in agreement to potentially take over as owner of Chicago White Sox — but not for several years yet

Jun 09, 2025