Builder confidence up
After a year of stagnant builder confidence levels, the National Association of Home Builders (NAHB) reported that October saw the first rise in builder confidence this year by four points, the largest single month gain since the home buyer tax credit stimulated buyers in April of 2010.
Today, the NAHB reports that confidence levels for November are up three more points, although the NAHB is cautious in cheerleading about these numbers. “While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers,” said Bob Nielsen, NAHB Chairman. “These problems must be addressed so that housing can contribute to economic and job growth the way it has in the past.”
Confidence levels rose in the three areas studied by the NAHB – sentiment on current sales conditions (up to its highest level since May 2010), future sales expectations (up to its highest level since March 2011) and traffic of prospective buyers (up to its highest level since May 2010). Regionally, confidence rose substantially in the Midwest, modestly in the Northeast and South and decreasing in the West after an inflated increase in October.
“This second consecutive gain in the HMI is evidence that well-qualified buyers in select areas are being tempted back into the market by today’s extremely favorable mortgage rates and prices,” said NAHB Chief Economist David Crowe. “We are anticipating further, gradual gains in the builder confidence gauge heading into 2012 due to these pockets of improving conditions that are slowly spreading.”