NEW YORK - Builders’ confidence in the market for new single-family homes was steady, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – remained 16 in December from an unrevised 16 in November.
Thomson Reuters' poll of economists predicted a level of 16.
“Builders are bracing themselves for a slow holiday season as a number of factors continue to cause uncertainty among consumers and builders alike,” said NAHB Chairman Bob Jones. “While the HMI is adjusted for seasonal factors, the typical cold-weather slowdown in sales activity is being accentuated by ongoing weakness in the job market, the rising number of foreclosures and short-sales, and very challenging credit conditions for both builders and buyers.”
“The steady but low level of the HMI reflects the fact that builders and consumers have yet to see consistent signs that the economy is improving,” NAHB Chief Economist David Crowe said. “The good news is that the index and its subcomponents remain above recent lows from the early fall. NAHB expects an improving job market this spring will help prospective buyers feel more confident and propel more sales activity in 2011. However, the continued problems that builders are facing in obtaining construction credit and accurate appraisal values could significantly slow the onset of a housing 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 held steady in December, while one slipped: the traffic of prospective buyers index inched down to 11 from 12. The current single-family home sales index held at 16, and the sales expectations index for the next six months remained at 25.
