NEW YORK - Builders’ confidence in the market for new single-family homes held at its low level as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – remained at 15 in August.
Thomson Reuters' poll of economists predicted the index would remain at 15.
“Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements,” said NAHB Chairman Bob Nielsen.
“The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time,” NAHB Chief Economist David Crowe said. “While buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey.”
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 rose in August. The current single-family home sales index climbed to 16 from 15, and the sales expectations index for the next six months slipped to 19 from 21. The traffic of prospective buyers index rose to 13 from 12.
