The National Association of Home Builders' (NAHB) index for confidence in the market for newly built, single-family homes slipped three points in April to 25, the first time the index declined in seven months.
The National Association of Home Builders' (NAHB) index for confidence in the market for newly built, single-family homes slipped three points in April to 25, the first time the index declined in seven months.
The decline brings the index back to where it was in January, which was the highest level since 2007. "Although builders in many markets are noting increased interest among potential buyers, consumers are still very hesitant to go forward with a purchase, and our members are realigning their expectations somewhat until they see more actual signed sales contracts," said Barry Rutenberg, chairman of the NAHB and a home builder from Gainesville, Fla.
Each of the index's components registered declines in April. The component gauging current sales conditions and the component gauging sales expectations in the next six months each fell three points, to 26 and 32, respectively, while the component gauging traffic of prospective buyers fell four points to 18. (The overall index and each of its components are seasonally adjusted.) Any HMI reading over 50 indicates that more builders view conditions as good than poor.
The NAHB characterized the decline as a "pause" in what it called a fairly rapid build-up in confidence among builders that started last September. "This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity, but is also reflective of the ongoing challenges that are slowing the housing recovery-particularly tight credit conditions for builders and buyers, competition from foreclosures and problems with obtaining accurate appraisals," said NAHB Chief Economist David Crowe.