NAHB Builder Confidence Falls in September, Remains Rangebound
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Builder confidence for newly-built single-family homes fell once again during the month of September.
Data from The National Association of Home Builders/Wells Fargo Housing Market Index Monday showed sentiment decreased one point from the previous month to 14 for September. The index has ranged between 13 and 16 points over the past six consecutive months.
Economists had been expecting a confidence reading of 15.
"The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," said NAHB Chief Economist David Crowe.
The results for this metric are derived from a monthly survey the NAHB has conducted for more than 20 years. The survey asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." It also calculates current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." Scores from each component are then used to calculate an adjusted index where any number over 50 indicates more builders view conditions as good than poor.
While the section gauging current sales conditions only fell one point to 14, the two sections gauging sales expectations and traffic of prospective buyers over the next six months feel two points each to 17 and 11, respectively.
The West side of the country posted a three point decline overall as the North East and South both saw a two point decline. The Midwest was the only region in the positive for September with a one point gain.
"Very little has changed in terms of housing market conditions so far this year," said NAHB Chairman Bob Nielsen. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit."
Data from The National Association of Home Builders/Wells Fargo Housing Market Index Monday showed sentiment decreased one point from the previous month to 14 for September. The index has ranged between 13 and 16 points over the past six consecutive months.
Economists had been expecting a confidence reading of 15.
"The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," said NAHB Chief Economist David Crowe.
The results for this metric are derived from a monthly survey the NAHB has conducted for more than 20 years. The survey asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." It also calculates current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." Scores from each component are then used to calculate an adjusted index where any number over 50 indicates more builders view conditions as good than poor.
While the section gauging current sales conditions only fell one point to 14, the two sections gauging sales expectations and traffic of prospective buyers over the next six months feel two points each to 17 and 11, respectively.
The West side of the country posted a three point decline overall as the North East and South both saw a two point decline. The Midwest was the only region in the positive for September with a one point gain.
"Very little has changed in terms of housing market conditions so far this year," said NAHB Chairman Bob Nielsen. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit."
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