NEW YORK - Builders’ confidence in the market for new single-family homes slipped in January, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – fell to 15, its lowest point since June, from December’s 16, the group announced this afternoon.
Thomson Reuters' poll of economists predicted a level of 17.
"At this point, home builders have done everything we possibly can to set the stage for a housing recovery – we’ve thinned our inventories, we’ve kept new construction to a minimum, and we’ve fought for and achieved a great new buying incentive with the extension and expansion of the home buyer tax credit," NAHB Chairman Joe Robson said. "We stand poised and ready to deliver new homes as soon as our customers are ready to take advantage of the tax credit and other historically good buying conditions in terms of interest rates, selection, and prices. Yet builders also realize that factors beyond our control – including consumer concerns about job security and competition from foreclosed homes on the market – are still impeding demand for new homes at this time."
“Home buying conditions have rarely been as good as they are right now, but consumers are still waiting to see significant positive signs of improvement in employment and confidence, and this is slowing buyers’ return to the market,” noted NAHB Chief Economist David Crowe. “Meanwhile, competition from foreclosed homes is also severely impacting new-home sales. That said, expected improvement in the job market this spring will help propel the housing recovery as we head into the prime home buying season.”
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.
Two of the three component indexes slid in January. The current single-family home sales index dipped to 15 from 16, and the traffic of prospective buyers index declined to 12 from 13. The sales expectations index for the next six months was flat at 26.
