Wednesday, January 16, 2013

Builder Confidence unchanged in January

by Bill McBride on 1/16/2013 10:00:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was unchanged in January at 47. Any number under 50 indicates that more builders view sales conditions as poor than good.

From the NAHB: Builder Confidence Holds Steady in January

Builder confidence in the market for newly built, single-family homes was unchanged in January, remaining at a level of 47 on the National Association of Home Builders/Wells Fargo Housing Market Index, released today. This means that following eight consecutive monthly gains, the index continues to hold at its highest level since April of 2006.
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“Builders’ sentiment remains very close to the index’s tipping point of 50, where an equal number of builders view conditions as good and poor, and fundamentals indicate continued momentum in housing this year,” said NAHB Chief Economist David Crowe. “However, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals and the ongoing stalemate in Washington over critical economic concerns continue to impede the housing recovery.”
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The index’s components were mixed in January. The component gauging current sales conditions remained unchanged at 51. Meanwhile, the component gauging sales expectations in the next six months fell one point to 49 and the component gauging traffic of prospective buyers gained one point to 37.

The HMI three-month moving average was up across all regions, with the Northeast and Midwest posting a two-point gain to 36 and 50, respectively. The South registered a three-point gain to 49 and the West posted a four-point increase to 51.
HMI and Starts Correlation Click on graph for larger image.

This 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 housing starts will be released tomorrow). This was slightly below the consensus estimate of a reading of 48.

Housing Investment and Construction Graphs

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