Builder Confidence Barely Budges, Outlook Grim

Washington, DC, January 16, 2008 -- Builder confidence in the market for new single-family homes was virtually unchanged for a fourth consecutive month in January as mortgage-market problems and inventory issues continued to pose challenges, according to the latest NAHB/Wells Fargo Housing Market Index.

The HMI rose a single point to 19 this month following a downwardly revised 18 reading in December and 19 readings in both October and November. Readings of more than 50 indicate a positive outlook.

“Builders are taking a realistic view of the continuing housing market correction and doing what they should to get inventories under control and restore greater balance to the supply and demand equation,” noted NAHB President Brian Catalde, a home builder from El Segundo, California.

NAHB Chief Economist David Seiders noted that the index has held within a two-point range for the past five months, indicating that builder views of housing market conditions essentially haven’t changed.

“Builders are anticipating a time when market conditions will support an upswing in building activity – most likely in the second half of 2008,” Seiders said.

In January, the index gauging current sales conditions for single-family homes remained unchanged at 19, while the index gauging sales expectations for the next six months rose two points to 28. Meanwhile, the index gauging traffic of prospective buyers rose one point to 14.

Regionally, the HMI results were mixed in January. The Northeast posted no change at 20, while the Midwest reported a two-point gain to 17 and the South registered a three-point gain to 23. The West posted a five-point decline to an HMI reading of 13.