The confidence
of U.S. home builders, while still in the dumps, managed
something in February it hasn't done in five months:
It rose.
The National Association of Home Builders released
Tuesday results of a monthly survey of builders' thoughts
on market prospects. Its latest index for sales of new,
single-family homes climbed to 9, up from an all-time
low of 8 in January.
The last time the housing market index, or HMI, showed
an increase was September.
But conditions are awful. The latest government data
show new-home sales dropped by about 15% to 331,000
in December. Year over year, sales were around 45% lower.
Builders don't want to break new ground because the
market is awash in unsold property. Bloated inventories
are driving down prices. Falling prices, in turn, and
a recession that's throwing people out of work have
combined to undercut demand.
"The market for new single-family homes remains
very weak at this time," NAHB Chairman Joe Robson
said.
Congress has approved a $787 billion plan to stimulate
the slumping economy. The legislation includes an $8,000
first-time home buyer tax credit. Builders hope the
package excites moribund demand for housing.
"Looking forward, we are certainly hopeful that
the newly passed economic stimulus bill, which includes
some favorable elements for first-time home buyers and
small businesses, will have a positive impact that will
help get housing and the economy back on track,"
said Mr. Robson, a builder from Tulsa, Okla.
A component within the housing market index that measures
current sales conditions rose to seven during February,
up from six. An index gauging traffic of prospective
buyers rose by three points to 11. But the index gauging
sales expectations in the next six months fell to a
new record low of 15 from 17.
"Home builders are especially concerned about
the continually rising number of foreclosures and short
sales, which are flooding the market with excess inventory
and undermining overall home values," said David
Crowe, NAHB's chief economist. "This is one reason
that home builder expectations for the next six months
declined in the February HMI even though traffic of
prospective buyers has improved somewhat and present
sales conditions were basically unchanged."
The NAHB's overall housing market index for February
was based on a survey of 421 home builders, who answer
questions about sales prospects now and in the near
term. When the Housing Market Index exceeds 50, it means
the number of builders who see "good" sales
outnumber the number who see "poor" sales.
The numbers used in compiling the index are adjusted
for seasonal variations.
Source: The Wall Street Journal, February 17, 2009
|
