The National Association of Home Builders reports today that:
"Builder confidence in the market for newly built, single-family homes rose six points to 35 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July, released today (see chart above). This is the largest one-month gain recorded by the index in nearly a decade (since September 2002), and brings the HMI to its highest point since March of 2007.
“Builder confidence increased by solid margins in every region of the country in July as views of current sales conditions, prospects for future sales and traffic of prospective buyers all improved,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “This is greater evidence that the housing market has turned the corner as more buyers perceive the benefits of purchasing a newly built home while interest rates and prices are so favorable.”
“Combined with the upward movement we’ve seen in other key housing indicators over the past six months, this report adds to the growing acknowledgement that housing – though still in a fragile stage of recovery – is returning to its more traditional role of leading the economy out of recession,” noted NAHB Chief Economist David Crowe. “This is particularly encouraging at a time when other parts of the economy have begun to show softness, and is all the more reason that the challenges constraining housing’s recovery – namely overly tight lending conditions, poor appraisals and the flow of distressed properties onto the market – need to be resolved.”
Every HMI component recorded gains in July. The components gauging current sales conditions and traffic of prospective buyers each rose six points, to 37 and 29, respectively, while the component gauging sales expectations for the next six months rose 11 points to 44. Likewise, every region posted HMI gains in July. The Northeast registered an eight-point gain to 36, while the Midwest gained three points to 34, the South gained five points to 32 and the West gained 12 points to 44."
Who writes the material for The National Association of Home Builders? I think that Leno and Conan are looking for comedy writers.
ReplyDeleteThis report is interesting. Much like the PMI, any reading below 50.0 indicates a contraction. Although the direction of the line is good, the overall number still signals contraction. This is interesting because construction at all levels (residential and nonresidential) is growing at double-digit rates. I wonder if the builders are reacting to the low level of activity, rather than the improvements in activity.
ReplyDeleteOn the one hand: building permits for single family homes were up 21% in May, year over year.
ReplyDeleteOn the other hand: Lowe's and Home Depot are reporting lower sales.
and on that other hand...
Google Search Trends for home builders and new homes languish at multi-year lows.
New home builders are optimistic (I used to be one), so they might be timing their build schedules to an assumed big reduction in used home inventory this summer.
The levels are still well below 50, plus:
ReplyDeleteThis Chart Proves The US Housing Recovery Will Be Local
http://www.businessinsider.com/see-how-your-housing-market-set-2012-7
RealtyTrac, CoreLogic Confirm Housing Bear Thesis: 85-90% of REO Being Held Off Market, Meaning “Tight” Inventories Are Bogus
http://www.nakedcapitalism.com/2012/07/realtytrac-corelogic-confirm-housing-bear-thesis-85-90-of-reo-being-held-off-market-meaning-tight-inventories-are-bogus.html
The making of a housing market – like a Hollywood set, housing inventory looks to be low only because that is what is being presented. Orange County foreclosure pipeline twice the size of non-distressed MLS inventory.
http://www.doctorhousingbubble.com/the-making-housing-market-sales-up-inventory-down-foreclosure-pipeline-healthy-2012/