NEW YORK - Builders’ confidence in the market for new single-family homes slipped in December, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – fell to 16, from November’s 17, the group announced this afternoon.
Thomson Reuters' poll of economists predicted a level of 18.
"From an affordability standpoint, rarely has there been a better time in history to purchase a home, thanks to record low interest rates, attractive prices, and of course the recent extension and expansion of the home buyer tax credit," NAHB Chairman Joe Robson said. "However, builders are not seeing the full impact of these conditions on buyer demand, partly because awareness of the latest incentives is still building, and partly because of concerns about job security and other economic woes."
“As we anticipated, this is shaping up to be a bumpy recovery period for the housing market,” noted NAHB Chief Economist David Crowe. “While some families may be just starting to factor the expanded tax credit into their potential home buying plans, many are hesitating because of the poor economy. At the same time, tight lending conditions for both consumers and home builders continue to pose considerable obstacles on the road to a sustained housing and economic recovery.”
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 December. The current single-family home sales index dipped to 16 from 17, and the traffic of prospective buyers index remained at 13. The sales expectations index for the next six months fell to 26 from 28.
