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 January, its third consecutive month at that low level.
Thomson Reuters' poll of economists predicted a level of 17.
“As we emerge from the traditionally slow holiday season, builders continue to look for signs of improvement in the economy, home buyer demand and builder and consumer credit conditions,” said NAHB Chairman Bob Nielsen. “Unfortunately, a severe lack of construction financing, and widespread difficulties in obtaining accurate appraisal values, continue to limit builders’ ability to prepare for anticipated improvements in buyer demand in 2011.”
“The HMI and its subcomponent indexes are holding steady following a below-expectations finish in 2010,” NAHB Chief Economist David Crowe said. “At this point, housing remains on the sidelines of a weak economic recovery as consumers and builders wait for clear and consistent indications that jobs and economic output are reviving. Meanwhile, the problems that builders continue to confront in obtaining production financing, and in maintaining performing lines of credit, threaten to 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 January, while one climbed a point: the traffic of prospective buyers index inched up to 12 from 11. The current single-family home sales index held at 16, and the sales expectations index for the next six months remained at 25.
