Builder Confidence Sits on Record Low: NAHB
Sometimes, with things in housing as bad as they are, you've got to look to find good news wherever you can. And the National Association of Home Builders did just that on Monday; the group's survey of home builder sentiment found that overall confidence held steady at a 16 reading -- a record low. But two of the three components that comprise the overall confidence measure increased slightly during the month, given the NAHB reason to hope for a better back half of the year. The group noted that builders did anticipate some improvement in the industry's outlook over the next six months; a component gauging sales expectations rose two points to 25, while a component measuring current sales conditions rose one point to 16. A measure of prospective buyer traffic, however, remained unchanged at 12 -- which paints a picture of hopeful builders, and a lack of prospective buyers. For its part, the NAHB said that its members are anticipating the positive impact of newly-enacted housing stimulus legislation, which provides for a temporary $7,500 tax credit for some first-time home buyers; temporary, at least, until Congress is likely lobbied to make the credit permanent later this year. Such was the case with increased conforming lending limits, and HW's sources say they expect the builders to push hard to make the credit permanent as well. "With the passage of crucial housing legislation last month that created an attractive home buyer tax credit, there is a sense that home sales may soon be reaching a turning point," said NAHB president Sandy Dunn. "Builders are anticipating the stimulative effects of this legislation and are optimistic that the tax credit will give those buyers who’ve been sitting on the fence the reason they need to jump back into the market." "While our overall measure of builder confidence remains at a record low at this time, it is a good sign that two out of three of the HMI’s component indexes rose in August, and this may be an indication that we are nearing the bottom of the long downswing in new-home sales," said NAHB Chief Economist David Seiders. "Our current forecast shows stabilization of sales during the second half of this year, followed by solid recovery in 2009 and beyond." For more information, visit http://www.nahb.com.