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Real Estate Blog & Resources

Home Builder Confidence Rises in February

It looks like the United States housing market is improving, which is a good thing. The NAHB is citing "favorable home buying conditions and signs of healing in the job market" upon release of the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) that was just released recently.

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This favorable news about the housing market comes from a monthly survey that National Association of Home Builders has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index estimates builder perceptions of latest single-family home sales and sales expectations for the next 6 months as "good," "fair" or "poor." The study also queries home builders to rate traffic of likely buyers as "high to very high," "average" or "low to very low." Scores for each factor are then utilized to calculate a seasonally adjusted index where any number over fifty indicates that more home builders consider sales conditions as good than poor.

"Builders are just beginning to see the anticipated effects of the home buyer tax credit on consumer demand," said NAHB Chief Economist David Crowe. "Meanwhile, another source of encouragement is the improving employment market, which is key to any sustainable economic or housing recovery. That said, several limiting factors are still weighing down builder expectations, including the large number of foreclosed homes on the market, the lack of available credit for new and existing projects, and inappropriately low appraisals tied to the use of distressed properties as comps."

The Housing Market Index (HMI) for February 2010 has gained two points and is up to 17. This is the highest level of the HMI since November 2009. According to the National Association of Home Builders, "While the Midwest and South each registered two-point gains, to 13 and 19, respectively, the Northeast and West each registered one-point declines, to 19 and 14, respectively." So, it appears that the housing market is doing better and picking up in the Midwest and in the Southern States. The housing markets in the Northeastern and Western States are still actually in a decline.