Builder Confidence Holds Steady in November

Builder confidence remained flat in the ""National Association of Home Builders'"":http://www.nahb.org/default.aspx (NAHB) November report, with a slight majority of builders saying market conditions are promising.

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The NAHB/Wells Fargo Housing Market Index (HMI) came out to 54 this month, unchanged from October's downwardly revised reading. An index value above 50 indicates that more builders view conditions as good than poor; November marks the sixth straight month in which confidence has hovered above the neutral mark.

""Policy and economic uncertainty is undermining consumer confidence,"" said NAHB chief economist David Crowe. ""The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.""

The index component measuring current sales conditions held steady in November at 58, with expected sales six months from now falling one point to an index value of 60. The component gauging buyer traffic also slipped one point, falling to 42.

""Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road,"" said NAHB chairman Rick Judson. ""Meanwhile, builders continue to face challenges related to rising construction costs and low appraisals.""

Two of the four Census regions reported improvements in their respective indices: the South, where confidence rose to an index value of 55, and the Northeast, which saw a 14-point turnaround to a value of 44, matching September's reading.

Meanwhile, the Midwest and West recorded decreases. The Midwest's index fell eight points to 54, while the West's index dropped a single point to 58.