Builder magazine reports buyer traffic is up, sales conditions have improved, and economists have given the go ahead to consider the foreclosure situation on the mend. But despite all the good news, builders are still wary—and with good reason. Between Wall Street’s upheaval and more whisperings of a double-dip recession, consumer confidence has frozen, keeping builder confidence stagnant as well.
According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence stayed stuck at 15 in August for the second month in a row. Any reading below 50 indicates that more builders see conditions as “poor” rather than “good”.
“While buying conditions are very favorable in terms of prices, interest rates, and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey,” said David Crowe, chief economist at the NAHB, in a statement regarding the numbers today.
While two of the index’s three components saw gains for the month—prospective-buyer traffic gained one point to come in at 13, and sales conditions gained a point bringing it to 16—builders’ sales expectations for the coming six months lost two points, falling to a reading of 19.
Geographically, results were mixed, with the Northeast coming in first with a four point gain to register an August reading of 19. The West gained one point to come in at 15. The South remained unchanged at 17, and the Midwest declined two points to a reading of 10. Read More.