Four-Month Upturn Ends as Builder Confidence Falls in October 2014

October 16th, 2014
in econ_news, syndication

from the National Association of Home Builders (NAHB)

After four consecutive monthly gains, builder confidence in the market for newly built single-family homes fell five points to a level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

Follow up:


Said NAHB Chairman Kevin Kelly:

We are seeing a return to the mid-50s index level trend established earlier in the summer, which is in line with the gradual pace of the housing recovery. While there was a dip this month, builders are still positive about the housing market.

Said NAHB Chief Economist David Crowe:

After the HMI posted a nine-year high in September, it's not surprising to see the number drop in October. However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.

Derived from a monthly survey that NAHB has been conducting for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for 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." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Table 2. NAHB/Wells Fargo National HMI - History
(Seasonally Adjusted)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
1985 50 58 54 49 51 54 58 58 56 59 58 57
1986 57 55 57 62 64 65 59 55 57 64 59 64
1987 63 60 60 59 55 56 55 54 52 50 56 51
1988 53 51 51 52 54 49 54 56 53 49 58 60
1989 54 53 48 44 44 45 46 50 51 48 46 43
1990 42 44 40 39 36 36 32 30 31 28 25 22
1991 20 27 36 41 40 42 41 36 37 37 37 35
1992 44 49 46 46 47 45 46 49 48 50 54 56
1993 55 52 53 52 51 53 57 60 62 66 71 71
1994 70 64 61 61 59 57 53 53 50 49 50 43
1995 40 42 40 42 43 45 49 50 51 55 52 53
1996 54 49 59 60 61 59 58 56 55 56 54 55
1997 54 52 57 56 55 56 55 58 59 59 58 60
1998 60 65 66 67 67 70 71 72 71 73 77 78
1999 75 71 71 71 75 77 75 72 72 69 70 70
2000 69 68 64 63 63 58 59 60 60 62 63 57
2001 52 58 60 59 58 59 57 59 55 46 48 55
2002 58 58 62 61 61 61 61 55 63 61 62 63
2003 62 63 56 55 60 63 65 67 67 69 68 69
2004 68 66 66 69 69 68 67 70 67 69 70 71
2005 70 69 70 67 70 72 70 67 65 68 61 57
2006 57 56 54 51 46 42 39 33 30 31 33 33
2007 35 39 36 33 30 28 24 22 20 19 19 18
2008 19 20 20 20 19 18 16 16 17 14 9 9
2009 8 9 9 14 16 15 17 18 19 17 17 16
2010 15 17 15 19 22 16 14 13 13 15 16 16
2011 16 16 17 16 16 13 15 15 14 17 19 21
2012 25 28 28 24 28 29 35 37 40 41 45 47
2013 47 46 44 41 44 51 56 58 57 54 54 57
2014 56 46 46 46 45 49 53 55 59 54

 

All three HMI components declined in October. The index gauging current sales conditions decreased six points to 57, while the index measuring expectations for future sales slipped three points to 64 and the index gauging traffic of prospective buyers dropped six points to 41.

Looking at the three-month moving averages for regional HMI scores, the Northeast and Midwest remained flat at 41 and 59, respectively. The South rose two points to 58 and the West registered a one-point loss to 57.









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