NEW YORK - Builders’ confidence in the market for new single-family homes surged in April, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – climbed to 19 from March’s 15, the group announced this afternoon.
Thomson Reuters' poll of economists predicted a level of 16.
“Home builders reported some real improvement in current sales activity and traffic of prospective buyers through their model homes over the past month,” said NAHB Chairman Bob Jones. “While we remain cautious about what future months will bring, it’s great to have this positive momentum at the start of the spring home buying season.”
“An expected surge in buyer activity leading up to the expiration of the home buyer tax credits and a gradually improving economy helped to brighten builders’ view of the marketplace in April,” NAHB Chief Economist David Crowe acknowledged. “Meanwhile, builders have a more neutral view of what may come in the next six months, and are very aware of the many factors that continue to drag on housing at this time – including the critical shortage of credit for new and existing projects, problems with inaccurate appraisals, and the ongoing flow of foreclosed properties on the market. Greater economic growth, particularly in the job market, and the abatement of these housing issues are needed to help move home building to a more sustained 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.
All three component indexes rose in April. The current single-family home sales index surged to 20 from 15, and the sales expectations index for the next six months inched up to 25 from 24. The traffic of prospective buyers index grew to 14 from 10.
