Builder's Confidence Slips
January 17, 2003
NAHB Says Overall Rating Still Strong, But Lingering Economic ConcernsKeeps Optimism In Check
Inman News Features
Builder confidence in the market for new single-family homes dropped slightly in January, but remained strong amidst an array of generally weak economic indicators, according to results of the National Association of Home Builders' Housing Market Index released today.
January's HMI fell one point to 64, returning to November's level after hitting a two-year high of 65 in December. The component index gauging current sales activity dropped to 69, down three points from December's 72 reading. The index gauging sales expectations in the next six months declined one point to 68, while the index gauging traffic of prospective buyers rose two points to 50 this month.
The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Home builders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair" or "poor." They are also asked to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low."
Scores for responses to each component are used to calculate a seasonally adjusted index, where any number over 50 indicates that more builders view sales conditions as good than poor.
"Builders are pleased with the way the market for new homes in most price ranges is holding up at this time," said Gary Garczynski, NAHB president and a home builder/developer from Woodbridge, Va. "Favorable interest rates on home mortgages and solid house-price performance continue to lead more people to consider a new-home purchase, as evidenced by the higher traffic of prospective buyers through model homes this month. But lingering concerns about the economy are keeping builders' optimism in check, as the flattening of today's index represents."
Washington-based NAHB is a trade association that represents more than 205,000 members involved in home building.
Copyright: Inman News Service