Builder confidence in the market for newly built single-family homes in July rose two points to 15, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Testament to the housing market's slow recovery, the latest figure marks the ninth time out of the past 10 months in which the index has held within the same three-point range.
"The improvement in builder confidence in July is a positive sign that the outlook perhaps isn't quite as bleak as was feared in June," said Bob Nielsen, chairman of the NAHB and a home builder from Reno, Nev.
Two out of three of the HMI's component indexes rebounded in July from declines in June. The component gauging current sales conditions rose two points to 15, returning to its May level, while the component gauging sales expectations in the next six months rose seven points to 22, which is where it stood in April. The component gauging traffic of prospective buyers held even with the previous month, at 12.
"While builders continue to confront serious challenges with regard to competition from foreclosed properties that are priced below replacement cost, inaccurate appraisals of new homes, and a very restrictive lending environment for new home construction, select markets are showing gradual improvement as consumers begin to take advantage of very favorable buying conditions," Nielsen added.
