NEW YORK - Builders’ confidence in the market for new single-family homes rose slightly, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – climbed to 16 in November from a downwardly revised 15 in October.
The October index was originally reported as 16.
Thomson Reuters' poll of economists predicted a level of 17.
“Though the gains have been incremental, the fact that builder confidence has improved over the past two months is encouraging,” said NAHB Chairman Bob Jones. “Many builders are reporting that while the quantity of buyer traffic through their model homes has not improved dramatically, the quality of that traffic seems to be getting better – meaning that more people appear to be serious about buying in the near future. Builders remain very concerned, however, about the lack of available financing for new-home construction at a time when inventories of completed new homes are quite thin; after all, you can’t sell what you can’t build.”
“The most positive aspect of today’s report is the future expectations component, which not only held onto the five-point gain it registered in October, but improved by an additional two points to 25 for November,” NAHB Chief Economist David Crowe said. “This is the highest that component of the HMI has been since the home buyer tax credit program spurred sales activity this spring.” At the same time, he noted, “The most concerning aspect of the report is that survey participants say they have observed absolutely no improvement in their ability to access credit to build viable new projects. This problem is clearly a roadblock to recovery in many markets.”
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 gained in November. The current single-family home sales index held at 16, and the sales expectations index for the next six months increased to 25 from 23. The traffic of prospective buyers index climbed to 12 from 11.
