Builder confidence in the market for newly built, single-family homes rose one point in August to its highest level in more than a year, according to the latest reading of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). But they’re a long way from ebullient.
Other signs that a housing recovery may already be under way also have emerged recently.
Building on a two-point gain in July, the HMI reached 18 this month, its highest point since June of 2008. In the seasonally adjusted index, any number greater than 50 indicates that more builders view sales conditions as good than poor.
Commented NAHB Chief Economist David Crowe:
“One very positive aspect of today’s report is the big gain registered in the component gauging home builders’ expectations for the next six months. This reflects anticipated sales stemming from the tax credit as well as recent signs that an economic recovery has begun. There is definitely a sense of hope among builders that the worst of the downturn is over and that a turning point is near at hand.”
Two out of three of the HMI’s component indices recorded substantial gains in August. The biggest boost, of 4 points, was registered by the index gauging sales expectations in the next six months, which rose to 30 this month. The index gauging traffic of prospective buyers gained three points, to 16, and the index gauging current sales conditions held unchanged at 16.
Am I missing something here? Eighteen points is a long, long, long way from 50. So Mr. Crowe’s assertion (which I helpfully underlined above) that there is “definitely a sense of hope” seems to me to be a far cry from reality.
But the builders’ views are welcome since they were so wrong about the future as they built and built and built before the bubble burst. If their low level of optimism is wrong now, too, maybe the housing recovery is upon us.
In fact, as I have reported here and will detail in my forthcoming e-newsletter, all signs point to grounds for highly tentative hope for the U.S. housing market.
As for the Manhattan housing market, the traditional boost in sales during spring seems to have been delayed to summer. Inventory is beginning to taper off. Finally. And, if my personal experience with renewed interest on the part of both buyers and sellers can be generalized, activity is “definitely” on the rise.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022