Last month’s International Builders’ Show was abuzz with the feeling that the industry is on the verge of a turn for the better, but according to builders polled for the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today, the market hasn’t quite turned the corner just yet.
The monthly index, for which any reading under 50 means a majority of builders rate conditions as "poor" rather than "good," was unchanged in March at 28. In its second consecutive month, the reading is the highest the industry has seen since June 2007, but the HMI’s component indexes indicate builders’ hope is being upheld by anticipation of better days ahead.
While the HMI’s component index gauging sales expectations in the next six months was up two points to 36, the component index measuring current sales conditions declined by a point to 29. The component index measuring prospective-buyer traffic was unchanged at 22.
"Builders still remain positive. They just haven’t seen their traffic or consumer interest turn into sales," said David Crowe, NAHB’s chief economist, in an interview with Builder today. "Anecdotal comments suggest the same thing, that builders are seeing a lot more serious interest than they have seen in the past, but the hurdles of qualifying for a mortgage and decent appraisals continue to dampen the ultimate purchase."
The market segments that are seeing the largest boosts in interest vary by local market, he says.
On a regional basis, the HMI was up in three of four areas: the Northeast gained five points to 25; the Midwest was up two points to 32; and the South gained two points to 27. The West fell 10 points to 33; however, the decline comes on the heels of a 22-point surge last month.
Claire Easley is a senior editor at Builder.
Learn more about markets featured in this article: Greenville, SC.