NEW YORK - Builders’ confidence in the market for new single-family homes was steady in November, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – held at 17, after October’s number was revised to 17 from 18, the group announced this afternoon.
Thomson Reuters' poll of economists predicted a level of 19.
"When the HMI survey was conducted at the beginning of this month, home builders were facing the imminent expiration of the $8,000 first-time home buyer tax credit at the end of November, with no guarantee that this valuable buyer incentive would be extended," NAHB Chairman Joe Robson said. "Now that Congress has done its job by both extending the tax credit into next year and expanding eligibility for it among potential buyers, we are very hopeful that this will have the intended stimulative effect on sales activity going forward."
“Today’s report confirms that home builders and buyers were in something of a holding pattern in early November as the anticipated expiration of the tax credit drew near and congressional action had not yet taken place to address this,” noted NAHB Chief Economist David Crowe. “Meanwhile, the challenges that builders are facing in obtaining credit for new housing production and appropriate appraisal values for their homes continued to worsen. These issues still present a very worrisome problem that is weighing down prospects for a sustained housing market 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 were flat in November. The current single-family home sales index held at 17, and the traffic of prospective buyers index remained 13. The sales expectations index for the next six months rose to 28 from 26.
