| |
Builder Confidence Rose in September
Reprint from Builder/Architect October 2008 issue
|
| |
|
Builder confidence in the market for newly built single-family homes rose
for the first time in seven months this September, according to the National
Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI
gained two points, to 18, rising from its record low of the previous two months.
"Builders have several reasons to be more optimistic at this time," noted
NAHB President Sandy Dunn, a home builder from Point Pleasant, WV.
"Many are sensing that home sales are nearing a turning point with the support
of the newly enacted first-time home buyer tax credit. Meanwhile,
with the government's explicit backing of Fannie Mae and Freddie Mac
now assured, this should help keep mortgage rates at very favorable levels going forward."
Following the Treasury Department's announcement that it was placing
mortgage giants Fannie Mae and Freddie Mac into conservatorship,
the average rate on 30-year fixed-rate conforming home mortgages declined
by nearly half a percentage point, falling to below 6% for the first time in
several months. Market responses to the Lehman Brothers bankruptcy filing
and the purchase of Merrill Lynch by Bank of America have put additional
downward pressure on prime conforming mortgage rates.
|
| |
| |
|
"Nearly half of the builders in our September survey indicated that they
expect to see a positive impact from the tax credit in their market areas," said
NAHB Chief Economist David Seiders. "Of those respondents, 20% said their
market has already experienced some of this effect. Meanwhile, consumer confidence
has risen and more households are saying that now is a good time to
buy a home. All of these factors, along with the recent downward movements
in mortgage rates, suggest that new home sales will be stabilizing in the final
quarter of the year."
|
| |
| |
|
Derived from a monthly survey that NAHB has been conducting for more
than 20 vears, the NAHB/Wells Fargo HMI gauges builder perceptions of
current single-family home sales and sales expectations for the next six months
as "good," "fair" or "poor." The survey also asks builders to rate traffic of
prospective buyers as "high to very high," "average" or "low to very Iow" 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.
All three of the HMI's component indexes rcgistcrcd gains in September.
The indexes gauging current sales conditions and traffic of prospective buyers
were each up a single point, to 17 and 14, respectively. Meanwhile, the index
gauging sales expectations for the next six months rose by six points, to 30,
which was four points higher than its year-ago level.
All regions also posted some degree of improvement in the September HMI,
with the Midwest, South and West each up two points, to 15, 22 and 12,
respectively, and the Northeast posting a six-point gain to 22.
|
| |
| |
|
The NAHB/Wells Fargo housing Market Index is strictly the product of NAHB Economics and is not seen or
influenced by any outside party prior to being released to the public. HMI tables can be accessed online
at www.nahh.org/hmi. More information regarding housing staistics is also available at www.housingeconomics.com
|
