Builders Sentiment Recovers

The NAHB/Wells Fargo Housing Market Index for June rose four points to 49, just shy of the 50 mark indicating at least as much optimism as pessimism among single-family home builders. The index dipped 10 points to 46 in February from a sustained above-50 mark for 8 months and remained near there for 4 months.

Builders are beginning to see customer confidence return but buyers do remain hesitant until their jobs are more secure and their home equity improves enough to make a down payment on a new home. The 4-month consecutive 200,000+ monthly increase in national job formations has and will continue to help consumes believe the economic recovery for the nation and for them individually will continue.

Builders remain cautious because of the consumers’ caution and because construction crews are difficult to find and keep. Builders will add homes when they are most secure that the home can be completed on time and that a buyer will be ready and able to purchase.

The June recovery was evident in all three components. The current sales index increased 6 points to 54, the expected sales for the next 6 months increase 3 points to 59 from a one point downwardly revised 56, and the traffic index increased 3 points to 36 from a 2-point upwardly revised May of 33. The three-month average regional indexes were mixed with the Northeast and South up one point to 34 and 49 respectively, the Midwest down one point to 46 and the West even at 47.

June HMI

3 Responses to Builders Sentiment Recovers

  1. […] improved indicator is the NAHB/Wells Fargo Housing Market Index (HMI), which rose four points in June to 49. This is just shy of the 50 mark, indicating at least as much optimism as pessimism among […]

  2. […] month-over-month decline in May should be considered along with the growth from last year.  If builder sentiment is a guide for future construction spending, cautious optimism is in order. The NAHB/Wells Fargo […]

  3. […] month-over-month decline in May should be considered along with the growth from last year.  If builder sentiment is a guide for future construction spending, cautious optimism is in order. The NAHB/Wells Fargo […]

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