Builder confidence is up
After a year of remaining stagnant, builder confidence in the market for newly built single-family homes is edging up for the third month, rising two points from an expected decline for December, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) announcement released today. Builder confidence has returned to May 2010 levels.
Each of the component indexes improved in December, rising in confidence in current sales conditions, sales expectations for the next six months and traffic of prospective buyers which is at its highest level since May 2008. Builder confidence was particularly strong in the Southern region and slighly improved in the West while the Midwest remained the same and the Northeast slipped a single point.
“While builder confidence remains low, the consistent gains registered over the past several months are an indication that pockets of recovery are slowly starting to emerge in scattered housing markets,” said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “However, the difficulties that both builders and buyers continue to experience in accessing credit for new homes are holding back potential sales even in areas where economic conditions are improving.”
“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”