Builder Confidence Too Low For Comfort

Well, at least it didn’t get worse.
Last month, builder confidence in new home construction hit its lowest level in 18 months, and this month, it stayed the same.

According to National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder confidence in the market for newly built, single-family homes was at 13 for August.

The latest NAHB/HMI was released to today with the same results: Builder confidence for new construction in September remained at 13, the lowest level since March of 2009.

For more than 20 years, the NAHB has been conducting this survey, which calculates builder perception of single-family home sales over the next six months. Any score above 50 means more builders view conditions in the industry as good rather than poor.
So, 50 is average.
Our current level: 13.

“In general, builders haven’t seen any reason for improved optimism in market conditions over the past month,” said NAHB Chairman Bob Jones. “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.”

The last time the index was above 50 was in April of 2006.
“The stall in the nation’s housing market continues,” said NAHB Chief Economist David Crowe. “Builders report that the two leading obstacles to new-home sales right now are consumer reluctance in the face of the poor job market and the large number of foreclosed properties for sale.”

If no one is buying new construction, then you can’t build new houses, and you can’t employ construction workers, which is an industry that has shown to help boost economic recoveries.
As far as foreclosure properties, the online site RealtyTrac reported last month that lenders took back more homes in August than in any month since the mortgage crisis began.

But, remember, sometimes you have to hit bottom before going back up.
“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 Crowe.
From your lips …