Conditions brightest in Northeast, South, survey finds
Friday, January 19, 2007
Inman News
Builder confidence rose two points in January to a six-month
high in response to increased buyer interest, but most builders don't expect a
surge in activity anytime soon, according to the National Association of Home
Builders/Wells Fargo Housing Market Index (HMI), released Wednesday.
Based on a monthly survey that measures builder perceptions
and expectations for home sales, the index rose to 35 in January from a reading
of 33 in December. An index rating above 50 indicates that more builders view
sales conditions as good, while a rating below 50 indicates that more builders
view conditions as poor.
NAHB Chief Economist David Seiders said several factors are
helping to resuscitate buyer demand, including reductions in mortgage interest
rates since mid-year, lower energy prices following what had been record highs,
solid growth in employment and household income, reductions in home prices, and
home builder sales incentives.
"Builders are starting to see that the worst is behind
them and that buying conditions have improved to the point that greater
optimism is warranted," Seiders said.
Two out of three component indexes registered improvement in
January, as the index gauging current single-family home sales and the index
gauging traffic of prospective buyers each gained three points, to 36 and 26,
respectively. The index gauging sales expectations for the next six months
remained unchanged at 49.
Meanwhile, three out of four regions surveyed in the HMI posted
gains in January. Two-point gains were registered in the Northeast, Midwest and
South, to 39, 24 and 41, respectively. The HMI for the West remained unchanged
from the previous month at 32.
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