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NAHB: Homebuilder Confidence Up in July

On Monday the ""National Association of Home Builders"":http://www.nahb.org/page.aspx/landing/sectionID=5 (NAHB) reported an increasingly sunny outlook among single-family homebuilders, with a Housing Market Index jointly released by ""Wells Fargo"":https://www.wellsfargo.com/ signaling a 13-point rise in homebuilder confidence-an uptick from the three-point plunge in June.


""The improvement in builder confidence in July is a positive sign that the outlook perhaps isn't quite as bleak as was feared in June,"" Bob Nielsen, ""NAHB"":http://www.nahb.org/page.aspx/landing/sectionID=5 chairman and a Reno-based homebuilder, said in a statement. ""While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions.""


According to the statement, the 20-plus-year-old Housing Market Index (HMI) weighs builder perceptions of anticipated sales and current single-family home sales over the next six months on a scale of ""good,"" ""fair,"" or ""poor."" Asking builders to gauge buyer traffic as ""high to very high,"" ""average,"" ""or ""low to very low,"" the survey adjusts aggregate scores on a seasonally adjusted basis, valuing any number above 50 as an indication that builders assess sales conditions as good rather than poor.

In July two of the HMI's three indexes saw surges, up from steady declines over May. Current sales conditions went up to 15 from two points-the same as in May-as sales expectations for the next six months jumped by 22 points. Traffic among prospective buyers stayed steady at 12 points, corresponding with last month's figures. Regionally, the Northeast showed a decline, dropping two points to 15. The HMI yielded steady increases for other regions, including the Midwest but also the South and West, which reflected gains that ran up to 12, 17, and 14, respectively.

""We view the upward movement in the July HMI as a correction from an exceptionally weak number in June that was at least partly attributable to negative economic news and the close of a disappointing spring selling season,"" said David Crowe, chief economist at the ""NAHB"":http://www.nahb.org/page.aspx/landing/sectionID=5. ""The strong rebound in sales expectations for the next six months likewise marks a return to trend. Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve.""

According to its Web site, the ""NAHB"":http://www.nahb.org/page.aspx/landing/sectionID=5 is a trade association that represents homebuilders nationally and reports data for the homebuilding industry.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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