The National Association of Home
Builders (NAHB)/Wells Fargo Housing Market Index (HMI) rose to 47 this month,
indicating a slight improvement in the confidence of home builders in the
market for new single family homes. At
the same time the March HMI was revised down to 46 from 47.
NAHB constructs the HMI from results of
a survey it conducts monthly among its homebuilder-members. Respondents are asked to give their
perceptions of current single-family home sales and expectations for those
sales over the next six months as "good," "fair" or
"poor." The survey also asks builders to rate traffic of prospective
buyers as "high to very high," "average" or "low to
very low." Each set of responses
as well as the composite are used to calculate seasonally adjusted indices
where any number over 50 indicates that more builders view conditions as good
NAHB said a Reuters' poll of economists
had predicted the HMI would rebound to 50 this month but it remains below that
benchmark level through the third consecutive survey. The HMI had recovered to a post-housing
crisis high of 58 late last summer.
"Builder confidence has been in a holding pattern the
past three months," said NAHB Chairman Kevin Kelly. "Looking ahead,
as the spring home buying season gets into full swing and demand increases,
builders are expecting sales prospects to improve in the months ahead."
component measuring current single family sales was unchanged at 51 from the March
number after it was revised down from 52.
Sales expectations over the next six months jumped to 57 from 52,
reaching a three month high. Prospective
buyer traffic was unchanged at 32 after the previous figure was revised lower
by one point.
"Headwinds that are holding up
a more robust recovery include ongoing tight credit conditions for home buyers
and the fact that builders in many markets are facing a limited availability of
lots and labor," NAHB Chief Economist David Crowe said.
The three-month moving average for
the HMI was down in all four regions from respective revised March numbers. In the Northeast the composite fell from 35
to 33. In the Midwest the number went
from 53 to 49; the South dropped 2 points to 47 and the West went from 60 to