NAHB Housing Index Dips to 14 in September

Builders’ confidence in the market for new single-family homes remained quite low as the National Association of Home Builders’ housing market index, a monthly gauge of builder sentiment, slipped to 14 in September from 15 in August.

Thomson Reuters’ poll of economists predicted the index would remain at 15.

“Very little has changed in terms of housing market conditions so far this year,” said NAHB chairman Bob Nielsen. “Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the [Standard & Poor’s] downgrade [of the United States] and congressional gridlock on the budget deficit.”

“The fact that the HMI continues to hover within such a narrow, low range reflects builders’ awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today’s uncertain economic climate,” said NAHB chief economist David Crowe. “While some bright spots are beginning to emerge … the broader picture remains fairly bleak due to the weak economy and job market.”

Derived from a monthly survey that is more than 20 years old, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales, traffic of prospective buyers, and sales expectations for the next six months as either “good,” “fair,” or “poor.” Scores are used to calculate a seasonally adjusted index. Any number over 50 indicates that more builders view sales conditions as good.

In September, the current single-family home sales index dropped to 14 from 15, and the sales expectations index for the next six months slipped to 17 from 19. The traffic of prospective buyers index slid to 11 from 13.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER