Builders’ overall assessment of the housing market held steady in April, with the NAHB/Wells Fargo Housing Market Index today reporting a reading of 20 for the third month in a row.
(An HMI overall score of 50 reflects a roughly equal number of builders responding rate the market positively as well as negatively. The last time the HMI hit 50 or above was in April 2006, with an index reading of 51.)
Like builder sentiment, buyer traffic stayed the same in April, with index readings of 19, where it has been since February.
The components of this stable but low overall HMI did indicate one positive shift: improved expectations. Builders report being more optimistic about single-family sales in the next six months, with this index component rising to 30. That figure represents the highest reading for future sales since August 2007.
Builders’ assessment of current home sales, however, slipped slightly to 18, down from last month’s reading of 20.
Such a slump concerns NAHB, whose chief economist today also asserted that the country has fallen into a mild recession.
“While builders continue to report improvements in traffic through their model homes compared with late last year, this activity has not translated to actual sales. That’s where Congress can make a big difference,” says David Seiders, NAHB’s chief economist. “Measures that stimulate consumer confidence in the housing market, push the fence-sitters into the ring, and put a floor under house prices can successfully halt the drag that housing is exerting on the national economy and help stabilize financial markets at the same time.”