Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Economic News

Builder confidence slides after months of improvement

Builder confidence has continued to improve, but has just had a setback, and although small, it could result in some slight forecasting adjustments for housing.

builder confidence

builder confidence

Builder confidence falls slightly

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today, builder confidence in the market for newly built, single-family homes fell one point to 46 in February, which the NAHB refers to as “virtually unchanged.”

Although any reading under 50 means that more builders are pessimistic about the market than optimistic, the index hit a ten year high last July, and continued to climb through the end of 2012. Current readings show a split in the market, with roughly half reporting optimism, the other half reporting pessimism.

“Partly due to ongoing uncertainties”

“Following solid gains over the past year, builder confidence has essentially leveled out and held in the same three-point range over the last four months,” noted NAHB Chairman Rick Judson. “This is partly due to ongoing uncertainties about job growth and consumer access to mortgage credit, but it’s also a reflection of the fact that builders are now confronting rising costs for building materials and, in some markets, limited availability of labor and lots as demand for new homes strengthens.”

“Having risen strongly in 2012, the HMI hit a slight pause in the beginning of this year as builders adjusted their expectations to reflect the pace at which consumers are moving forward on new-home purchases,” observed NAHB Chief Economist David Crowe. “The index remains near its highest level since May of 2006, and we expect home building to continue on a modest rising trajectory this year.”

Advertisement. Scroll to continue reading.

Builder confidence falls, but not in all categories

The HMI component measuring current sales fell one point to 51 in February, and builder confidence in traffic of prospective buyers fell four points to 32. Builders aren’t eternally pessimistic, however, as shown in the HMI component gauging sales expectations for the next six months which actually rose by one point to 50.

According to the NAHB, “Three-month moving averages for each region’s HMI score were mixed in February, with the Northeast up three points to 39 and the West up four points to 55 and the Midwest and South each down two points, to 48 and 47, respectively.”

In January of this year, the HMI didn’t budge up or down, and what we reported at that time remains true. “With lending conditions remaining tight and economic uncertainties stifling all industries, the housing sector remains in a challenging position as it marches down the long road to recovery, so builder confidence remaining unchanged is good news in light of the massive challenges on builders’ minds.”

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

1 Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Economic News

(BUSINESS NEWS) Ben Carson's initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?

Housing News

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as...

Housing News

(Housing News) If you own a home or are thinking of buying, you should know the factors that give you an advantage with your...

Housing News

(Housing) Realtors are tasked with being up to date on endless information, and attending the annual REALTORS Conference and Expo is a fast way...

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.