The market for new homes remains sluggish, according to the National Association of Home Builders' housing market index (HMI), which held steady in September with a reading of 13.
"In general, builders haven't seen any reason for improved optimism in market conditions over the past month," said Bob Jones, the Bloomfield Hills, Mich., builder who is NAHB’s chairman. "If anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy."
Buyers have good reasons to feel cautious. Many have seen their household net worth erode, damaged both by a weak stock market and softening home prices. And, while the government has now officially declared that the recession ended in June 2009, the unemployment rate remains uncomfortably close to double-digits (9.6% in August).
Unfortunately, readings for all three individual components of the HMI reflected this uncomfortable economic reality. Buyer traffic slipped one point, to a reading of 9. Both current sales conditions and sales expectations for the next six months stayed the same in September, with current sales posting a reading of 13 and sales expectations for the next six months recording a slightly more optimistic 18.
"The stall in the nation's housing market continues. … However, we do expect that moderate improvement in the job market will help boost consumer confidence and improve conditions for new-home sales in this year's final quarter,” said David Crowe, NAHB’s chief economist.
Alison Rice is senior editor, online, at BUILDER magazine.
