Builder Confidence Stabilizes at Pre-Crash Level
Builder confidence remained stable this month. The National Association of Home Buildersrn(NAHB)/Wells Fargo Housing Market Index (HMI) added a point to reach 61, thernhighest for the HMI since November 2005. rnThe Index hit 60 in June for the first time in ten years and wasrnunchanged at that level in July. </p
The HMI and its three component indices are derived from a monthly surveyrnNAHB conducts among its new home builder members to gauge their perceptions ofrnsingle-family home sales both current and over the upcoming six months. Respondents are also asked to rate currentrnbuyer traffic as “high to very high,” “average” or “low to very low.” Scoresrnfor each component are then used to calculate a seasonally adjusted index wherernany number over 50 indicates that more builders view conditions as good thanrnpoor. NAHB has conducted the survey forrnover 30 years.</p
The index measuring buyer traffic, which consistently lags the other two byrndouble digits, gained two points to 45. rnThe component gauging current sales conditions rose one point to 66 andrnthe one indicating expectations over the next six months was unchanged atrn70. </p
“The fact the builder confidence hasrnbeen in the low 60s for three straight months shows that single-family housingrnis making slow but steady progress,” NAHB Chairman Tom Woods said. “However, werncontinue to hear that builders face difficulties accessing land andrnlabor.” </p
“Today’s report is consistent with our forecast for a gradual strengthening</bof the single-family housing sector in 2015," said NAHB Chief Economist DavidrnCrowe. "Job and economic gains should keep the market moving forward at arnmodest pace throughout the rest of the year."</p
Looking at the three-month moving averages for regional HMI scores, the Westrnand Midwest each rose three points to 63 and 58, respectively. The South postedrna two-point gain to 63 and the Northeast held steady at 46.
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