Builder confidence in the market for newly built, single-family homes is unchanged at 16 for a third consecutive month, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). NAHB Chairman Bob Nielsen attributed the result to a severe lack of construction financing and widespread difficulties in obtaining accurate appraisal values. These limitations are hurting builders' ability to prepare for anticipated market improvements in 2011, Nielsen added.
"At this point, housing remains on the sidelines of a weak economic recovery as consumers and builders wait for clear and consistent indications that jobs and economic output are reviving," said NAHB Chief Economist David Crowe. "Meanwhile, the problems that builders continue to confront in obtaining production financing, and in maintaining performing lines of credit, threaten to significantly slow the onset of a housing recovery."
The HMI comprises three components, and two of the three remained unchanged from December: the component gauging current sales conditions (which remained at 16) and the component gauging sales expectations in the next six months (which was flat at 25). The component gauging traffic of prospective buyers crept upward a single point to 12. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
