Wednesday, April 15, 2020

NAHB: Builder Confidence "Plunged" to 30 in April

by Calculated Risk on 4/15/2020 10:07:00 AM

The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 30, down from 72 in March. Any number below 50 indicates that more builders view sales conditions as poor than good.

From NAHB: Builder Confidence Posts Historic Decline on Coronavirus Pandemic

Reflecting the growing effects of the COVID-19 pandemic, builder confidence in the market for newly-built single-family homes plunged 42 points in April to 30, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. The decline in April was the largest single monthly change in the history of the index and marks the lowest builder confidence reading since June 2012. It is also the first time that builder confidence has been in negative territory (below 50) since June 2014.

“This unprecedented drop in builder confidence is due exclusively to the coronavirus outbreak across the nation, as unemployment has skyrocketed and gaps in the supply chain have hampered construction activities,” said NAHB Chairman Dean Mon.
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The HMI index gauging current sales conditions dropped 43 points to 36, the component measuring sales expectations in the next six months fell 39 points to 36 and the gauge charting traffic of prospective buyers also decreased 43 points to 13.

Looking at the monthly averages regional HMI scores, the Northeast fell 45 points in April to 19, the Midwest dropped 42 points to 25, the South fell 42 points to 34 and the West dropped 47 points to 32.
emphasis added
NAHB HMI Click on graph for larger image.

This graph show the NAHB index since Jan 1985.

This was well below the consensus forecast. This survey took place between April 1 and April 13 and shows the impact of COVID-19.

Note: The graph shows the 2020 recession starting in March 2020.