Builders’ confidence in the market for new single-family homes rose in July, as the National Association of Home Builders’ housing market index climbed to 17 from 15 in June, the group announced yesterday.
Thomson Reuters’ poll of economists predicted a level of 16.
“Although today’s HMI is positive news that helps confirm the market is bouncing around a bottom, the gain was entirely contained in the component gauging current sales conditions, while the component gauging sales expectations for the next six months remained virtually flat for a fourth consecutive month,” noted NAHB chief economist David Crowe. “Builders recognize the recovery is going to be a slow one and that we are facing a number of substantial negative forces.”
For example, a quarter of all new-home sales are falling through due to appraisal issues tied to the use of distressed and foreclosed properties as comparably priced houses. “This is a tremendous obstacle for a housing market that is struggling to get back on its feet, as is the lack of available credit for acquisition, development and construction financing,” Crowe said.
