The nation's homebuilders are still seeing a lot of dark tunnel ahead judging by their responses in the most recent survey of attitudes about the home sales market conducted by the National Association of Homebuilders (NAHB). According to results of the survey the NAHB/Wells Fargo Housing Market Index (HMI) released Tuesday remained stuck at 16 for the fourth consecutive month.
The survey, which has been conducted for over 20 years, measures the confidence of homebuilders using three criteria; builder expectations of current single-family home sales and their expectations for sales over the next six months, each measured as "good," "fair" or "poor;" and their perceptions of prospective buyer traffic as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor. The HMI has not topped 50 since late in 2006.
Two of the component indexes did increase slightly this month. Perceptions of current sales conditions rose from 15 to 17 and the component gauging sales expectations over the next six months rose one point to 25. The third component, level of current traffic, remained unchanged at 12.
On a regional basis, HMI scores were mixed in February. The Northeast registered a two point gain to 22; the South went up one point to 18, the other two regions declined; the Midwest one point to 12 and the West two points to 13.
NAHB Chairman Bob Nielsen blamed the lack of confidence on a tight lending environment making it difficult for builders to obtain credit for new and existing projects combined with a mixture of other market issues such as inaccurate appraisals and the ongoing flood of foreclosures.
NAHB Chief Economist David Crowe echoed Nielsen on the problem of tight credit to builders and added, "Builders are telling us that some pockets of optimism have begun to emerge, but many prospective purchasers are concerned about selling their existing home in the current market, or face difficulty securing credit for a home purchase -- even when they are well-qualified."
