Washington, DC, Nov. 20--Builder confidence in the market for new single-family homes dipped slightly in November after reaching its highest point in nearly four years during October, the National Association of Home Builders (NAHB) reported. NAHB’s Housing Market Index, a monthly gauge of builder sentiment, showed a three point decline to 69 this month.
"After the really solid sales activity of this summer and early fall, builders remain in very good spirits heading toward the holidays," said NAHB President Kent Conine, a home and apartment builder from Dallas. "However, we’re seeing some slowdown in visitors to model homes. That’s a typical observation builders are making."
"All the fundamentals remain in place for a healthy housing market--including mortgage rates in the six percent range, reviving consumer confidence and impressive house-price performance," said NAHB Chief Economist David Seiders. "However, many of the fence-sitters went ahead and made their moves when rates were so good in October, so a moderate decline in the HMI is to be expected at this point."
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 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.
Each of the HMI’s component indexes dipped, but remained in historically healthy ranges, in November. The index gauging current sales conditions recorded a marginal one point decline to 77, while the index gauging sales expectations for the next six months dropped three points to 79. The most significant decline occurred in the index gauging traffic of prospective buyers, which fell six points to 46 in November.
