Builders continue to see the housing market in increasingly gloomy terms, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), which fell to a new record low of 8 in January.
That figure, released today, reflects even weaker sales for new-home sales in early 2009. Current sales conditions, one of the index’s three components, slipped 2 points to a reading of 6. Despite that, though, builders are maintaining some optimism. Their assessments of buyer traffic and sales expectations for the next 6 months each rose one point.
Builders are clearly trying to respond to consumers’ economic concerns with new, smaller products. In a presentation today at the International Builders’ Show in Las Vegas, Gopal Ahluwalia said that the average and median square footage for new-home starts unexpectedly dropped by 200 square feet in 2008’s third quarter. That translates into an average of 2,438 square feet and a median size of 2,090 square feet, as based on Census data. Similarly, Ahluwalia said that a January survey of builders by NAHB found that 89 percent of respondents planned to build lower-prices models and 88 percent planned to build smaller homes.
Alison Rice is senior editor, online, at BUILDER magazine.
Learn more about markets featured in this article: Las Vegas, NV.