NEW YORK - 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 S&P downgrade 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,” NAHB Chief Economist David Crowe said. “While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market.”
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 either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "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.
All three component indexes fell 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.
