Builder confidence in the market for newly built, single family homes rose four points in June, to a level of 49, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

"After several months of little fluctuation, a four-point uptick in builder sentiment is a welcome sign, and shows some renewed confidence in the industry," observed NAHB Chair Kevin Kelly. 

The HMI is derived from a survey that NAHB has been conducting every month for 30 years. The index gauges homebuilders' perceptions of current single family home sales and sales expectations for the next six months, ranging from good to poor. The survey also asks them to rate prospective buyer traffic, ranging from high to low. Scores from each sector are then used to calculate a seasonally adjusted index where any number over 50 reflects that builders view conditions as good. 

In June, all three indices posted gains. In fact, the component that gauges current sales conditions reached 54, a six-point increase. The component that measures the next six months' sales expectations rose three points to 59, as did the component that measures buyer traffic, to 36. All told, the west held steady at 47, while the northeast and south edged up a point each to 49 and 34. And the midwest fell by a point, to 46.

David Crowe is NAHB's chief economist. He said that homebuyers are still hesitant, and are "waiting for clear signals of full-fledged economic recovery before making a home purchase. Builders are reacting accordingly, and are moving cautiously in adding inventory." Read more...

David Crowe is NAHB's chief economist.

 

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