Between on-going worries about the fiscal cliff and the future of the mortgage interest deduction, not to mention doubt about whether lawmakers can reach some sort of consensus to deal with the nation’s financial problems, builders’ confidence in the new-home market stalled in January.
Builder confidence remained at 47 on the NAHB/Wells Fargo Housing Market Index. Any number over 50 in the 25-year-old index indicates more builders view single-home sales conditions as good than poor. The index had improved for eight months before stalling at 47 in January. Still, it’s been at the highest levels seen since April 2006.
“Builders’ sentiment remains very close to the index’s tipping point of 50, where an equal number of builders view conditions as good and poor, and the fundamentals indicate momentum in housing this year,” said NAHB chief economist David Crowe. “However, persistently tight mortgage credit conditions, difficulties in obtaining accurate appraisals, and the ongoing stalemate in Washington, D.C., over critical economic concerns continue to impede the housing recovery.”
The survey components result gauging current sales conditions remained unchanged at 51. However, the component gauging sales expectations in the next six months fell one point to 49. The component gauging traffic from potential buyers gained one point to 37.
The confidence level’s moving average was up in all regions of the country. The Northeast and Midwest builders’ confidence each gained 2 points, to 36 and 50 respectively. The South jumped 3 points to 49, and the West moved up by 4 points to 51.
Teresa Burney is a senior editor for BUILDER magazine.