Builders in the West and Midwest are feeling more confident, while the South and Northeast remain less sure, as their confidence levels dip.
Home builders’ confidence edges up slightly
According to the National Association of Home Builders (NAHB)’ Housing Market Index (HMI) report, builder confidence rose one point to 29 in the month of June, the highest level since May of 2007, well before the housing market took a nosedive. The NAHB notes that only when the index rises above 50 points to more builders view sales conditions as good than as poor.
“This month’s modest uptick in builder confidence comes on the heels of a four-point gain in May and is reflective of the continued, gradual improvement we are seeing in many individual housing markets as more buyers decide to take advantage of today’s low prices and interest rates,” said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla.
“While the June HMI is in keeping with our forecast for gradually improving single-family home sales this year, recent economic reports that have shown some weakening in the pace of recovery likely factored into the marginal gain,” said NAHB Chief Economist David Crowe. “In addition, builders across the country continue to report that overly tight lending conditions and inaccurate appraisals are major obstacles to completing sales at this time.”
Confidence measurements varied
Confidence regarding current sales conditions rose two points in June to 32, their highest level since April of 2007, while confidence in sales expectations for the next six months and traffic of prospective buyers held unchanged at 34 and 23, respectively.
Regionally, the HMI results were mixed in June, with two areas of the country posting gains and two posting declines. The Midwest registered a five-point gain to 31 and the West registered a four-point gain to 33, while the Northeast and South each posted two-point declines, to 29 and 26, respectively.