Tuesday, January 19, 2010

NAHB: Builder Confidence Declines in January

by Bill McBride on 1/19/2010 01:00:00 PM

Residential NAHB Housing Market Index Click on graph for larger image in new window.

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

The housing market index (HMI) was at 15 in January. This is a decrease from 16 in December and 17 in November

The record low was 8 set in January. This is still very low - and this is what I've expected - a long period of builder depression. The HMI has been in the 15 to 19 range since May.

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

HMI and Starts Correlation This second graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the January release for the HMI and the November data for starts (December starts will be released Wednesday Jan 19th).

This shows that the HMI and single family starts mostly move in the same direction - although there is plenty of noise month-to-month.

And right now they are moving sideways - at best.

Press release from the NAHB: (added) Builder Confidence Declines in January

The January HMI fell one point to 15, its lowest point since June of 2009. Two of its three component indexes registered one-point declines, with the index gauging current sales conditions and the index gauging traffic of prospective buyers falling to 15 and 12, respectively. The index gauging sales expectations in the next six months held even, at 26.

The HMI edged down by a single point in three regions, with the Northeast falling to 22, the Midwest down to 11 and the South declining to 16. The HMI fell three points in the West, to 16. 

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