EconoIndicators

Housing Market Index At a Glance

• Current Month Index: 19
• Monthly Change: Up 1
• Current 1-Family Sales Index: 19
• Monthly Change: Unchanged
• Sales Expectations Index: 28
• Monthly Change: Up 2
• Buyer Traffic Index: 14
• Monthly Change: Up 1
• South Regional: 23
• West Regional: 13
• Northeast Regional: 20
• Midwest Regional: 17

Technorati Tags: Housing Market Index, housing market, homebuilder, confidence

Builder Confidence Virtually Unchanged In January

January 16, 2008 - Builder confidence in the market for new single-family homes was virtually unchanged for a fourth consecutive month in January as mortgage-market problems and inventory issues continued to pose challenges, according to the latest NAHB/Wells Fargo Housing Market Index (HMI), released today. The HMI rose a single point to 19 this month following a downwardly revised 18 reading in December and 19 readings in both October and November of 2007.

“Builders are taking a realistic view of the continuing housing market correction and doing what they should to get inventories under control and restore greater balance to the supply and demand equation,” noted NAHB President Brian Catalde, a home builder from El Segundo, Calif.

“The HMI has held within a narrow two-point range for the past five months, indicating that builder views of housing market conditions essentially haven’t changed over that time,” said NAHB Chief Economist David Seiders. “Builders are anticipating a time when market conditions will support an upswing in building activity – most likely in the second half of 2008.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as either “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

In January, the index gauging current sales conditions for single-family homes remained unchanged at 19, while the index gauging sales expectations for the next six months rose two points to 28. Meanwhile, the index gauging traffic of prospective buyers rose one point to 14.

Regionally, the HMI results were mixed in January. The Northeast posted no change at 20, while the Midwest reported a two-point gain to 17 and the South registered a three-point gain to 23. The West posted a five-point decline to an HMI reading of 13.

“We applaud the Federal Reserve’s stated willingness to act aggressively to help stimulate the economy through further rate cuts in the coming weeks,” noted Catalde. “Congress must also continue its efforts to help resolve the credit crunch and get housing back on track by moving quickly to get a Federal Housing Administration reform bill to the President’s desk and accomplish much-needed oversight reform for the government-sponsored enterprises Fannie Mae and Freddie Mac.”

Housing Market Index Chart - January 2008 [Excel]

Source: Wells Fargo and National Association of Homebuilders