Tuesday, February 17, 2009

NAHB Housing Market Index Near Record Low

by Bill McBride on 2/17/2009 01:00:00 PM

Residential NAHB Housing Market Index This graph shows the builder confidence index from the National Association of Home Builders (NAHB).

The housing market index (HMI) increased slightly to 9 in February from the record low of 8 set in January.

Note: any number under 50 indicates that more builders view sales conditions as poor than good.

Press release from the NAHB: Builder Sentiment Remains At Historic Lows In February

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today, held in the single digits for a fourth consecutive month in February. The HMI rose a single point to 9 – virtually unchanged from an all-time record low in the previous month – indicating that home builders have seen essentially no improvement in the market for new, single-family homes.

“Clearly, the market for new single-family homes remains very weak at this time,” said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “However, looking forward, we are certainly hopeful that the newly passed economic stimulus bill, which includes some favorable elements for first-time home buyers and small businesses, will have a positive impact that will help get housing and the economy back on track.”
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“Home builders are especially concerned about the continually rising number of foreclosures and short sales, which are flooding the market with excess inventory and undermining overall home values,” noted NAHB Chief Economist David Crowe. “This is one reason that home builder expectations for the next six months declined in the February HMI even though traffic of prospective buyers has improved somewhat and present sales conditions were basically unchanged. We are therefore looking forward to working with the Treasury Department as details of its plan to address the urgent foreclosure problem emerge.”
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Two out of three of the HMI’s component indexes gained a bit of ground in February, with the index gauging current sales conditions rising a single point to 7 and the index gauging traffic of prospective buyers rising three points to 11. Meanwhile, the index gauging sales expectations in the next six months fell two points to a new record low of 15.

Regionally, the HMI rose a single point in both the South and West, to 12, and 5, respectively, in February. The Midwest posted a two-point gain, to 8, and the Northeast registered a one-point decline, to 9.