Builder confidence in the market for newly built, single-family homes dipped by a single point in September to 14 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The index has now held between 13 and 16 for six consecutive months.
"Very little has changed in terms of housing market conditions so far this year," said NAHB chairman Bob Nielsen, a home builder from Reno, Nev. "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."
NAHB chief economist David Crowe said: "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. While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market."
The NAHB has been conducting its monthly builder confidence survey for more than 20 years, asking builders of single-family homes to rate their sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to gauge traffic of prospective buyers as "high to very high," "average" or "low to very low." The index is then calculated and seasonally adjusted. Any number over 50 indicates that more builders view sales conditions as good than poor.