Home Buildlers’ Outlook Improves
The outlook for the new home construction market is looking slightly better, though still far from an actual recovery, according to new figures from the National Association of Home Builders (NAHB).
Builder confidence rose for the third consecutive month in December, to its highest point since May 2010, on the newest NAHB/Wells Fargo Home Market Index. That’s the good news. The bad news is that the index only rose two points to a rating of 21, on a scale where a reading of 50 indicates builders are evenly divided over whether the outlook for the home construction market over the next six months is good or poor.
“This is the first time that builder confidence has improved for three consecutive months since mid-2009, which signifies a legitimate though slowly emerging upward trend,” said NAHB Chief Economist David Crowe. “While large inventories of foreclosed properties continue to plague the most distressed markets and consumer worries about job security and the challenges of selling an existing home remain significant factors, builders are reporting more inquiries and more interest among potential buyers than they have seen in previous months.”
Best prospects seen in South, Midwest
Builders were most optimistic in the South, where the regional index posted a four-point gain to 25, it’s highest since March 2008. The most pessimistic outlook was in the Northeast, where the regional index fell one point to 15, followed by the West, which showed a one-point gain to 16. The Midwest held unchanged at 24.
Nationally, builders were most optimistic about sales potential over the next six month, which rose one point to a rating of 26. Their assessment of current customer traffic rated only an 18, but that was up three points from November, while their view of current sales conditions rose two points to an index rating of 22.
By: Peter King
