Friday, May 20, 2011

BUILDER CONFIDENCE GETS NO SPRING BUMP

The National Association of Home Builders' index of builder sentiment came in flat in May, month-over-month, despite a rise in home sales, as interest among potential buyers remained sluggish.

The NAHB said early Monday its confidence index, which measures builder perceptions of current single-family home sales and sales expectations for the next six months, came in flat at a reading of 16 in May.
"Builder confidence has hardly budged over the past six months as persistent concerns regarding competition from distressed property sales, lack of production credit, inaccurate appraisals, and proposals to reduce government support of housing have continued to cloud the outlook," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. "In addition, many builders in this month's survey cited high gas prices as a further contributor to consumer anxiety and reluctance to go forward with a home purchase."

Potential buyer traffic ticked up one point in the recent survey, but those prospective buyers "remain extremely hesitant due to a number of factors," said NAHB Chief Economist David Crowe. "Asked to identify reasons that potential customers are holding back at this time, 90% of builders surveyed said clients are concerned about being able to sell their existing home at a favorable price, while 73% said consumers think it will be difficult for them to get financing. Clearly, access to credit for both builders and buyers remains a considerable obstacle to the revival of the new-homes market."
The index's components include current sales conditions, sales expectations and traffic of prospective buyers. The first two components were unchanged in January at readings of 16 and 25, respectively, while traffic of prospective buyers edged up a single point to 12.

The homebuilder sector is well off its late-spring peak, when buyers were rushing to take advantage of federal tax credits for homebuyers, and is only slightly higher than at the beginning of 2010.

4 comments:

Carol Beck said...

All we hear is how bad everything is. Don't you think that the potential new home buyers may read this and think "things are bad, this might not be a good time to build a new home"? Come on, report the good, any good, and stop dragging down the industry. I agree that the modular housing industry is not as great as it was several years ago but every time I see it getting better someone reports how bad it is and then it goes down again. We have to stick together and try to work toward improvement and it will get better.

Coach said...

Carol, I agree that we need to try to work toward improvement and get better but I only report what is out there. Saying it is not relevant does not help either.

We must work harder than ever to get home sales, not because we can't build them, it's because it is getting tougher to compete with distressed properties and for buyers to get mortgages.

If you visit this site's sister blog, http://www.modularhomecentral.blogspot.com/,you will geared toward new home buyer and not the modular factory or their builders.

Anonymous said...

Carol, something as innocuous as the posting by Coach IS NOT going to harm new home sales. I think it is a little naive to think such a post has a negative impact.
I agree with your comment about "sticking together" but tell me the last time you saw the modular industry stick together on a unified marketing plan to improve the modular image or to increase market share. Need I say more?

Carol Beck said...

Sorry I didn't mean to imply that this article alone was going to bring down the industry but all the negativity in the news in general may make potential home buyers think. It just seems one day I read about things getting better and then the next that things are falling apart.