BluefoxToday blog : Home builders more confident about housing

Home builders more confident about housing

After having endured a long stretch of dismal news, home builders are now feeling more optimistic about the state of the real estate market. The National Association of Home Builders, or NAHB, and Wells Fargo together periodically compile an industry survey called The Housing Market Index. It's based on how builders feel about single-family home sales, their outlook for sales six months out and the number of prospective buyers.

Looking at the latest index in April from purely numbers point of view, it jumped over 50%, climbing to 14 from a meager 9, the old mark. When the survey was started in 1985, the baseline was set at 50. From then on it has generally fluctuated between 20 and 70. When the current mortgage and housing market meltdown came roaring it, it sunk mercilessly to single digits and is now trying to get out of there.

The increase is substantial and welcome news. To many in the industry it signals that a housing market bottom may have been reached, or at least is imminent. That may be a bit premature, though.

The poor employment picture continues to keep many would-be home buyers on the sidelines. Mortgage funding is widely available, but qualification requirements are still strict, dampening the hopes of scores of borrowers. Existing homes, like in Las Vegas most of them bank REOs, are often priced much lower, leaving similar-sized new homes at a distinct disadvantage. 

It could be that the upbeat index is a reflection of participants predicting the historically strong spring and summer buying season will this time bring along better sales figures. They also could be counting on Washington stimulus efforts slowly starting to bear fruit. Time will tell.

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 10 commentsEsko Kiuru • April 16 2009 05:33PM

Comments

I love to see optimism grow.  In reality we will see alot of mergers this year; but, that, in time, we move us forward quicker.

Posted by TIM MONCRIEF, Over 2,000 homes sold….. (Keller Williams Realty) almost 9 years ago

Nice summary of the current market conditions. It seems like there definitely are some "glimmers of hope."

Posted by Casey Wright (WingWire) almost 9 years ago

We just sold 2 new homes in the past few weeks.  It was a great experience for all!

Posted by Jim Crawford, Jim Crawford Atlanta Best Listing Agents & REALTOR (RE/MAX Paramount Properties) almost 9 years ago

Esko, I never followed that index so thanks for explaining it.  I do think the bottom is in sight.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 9 years ago

Esko, good upbeat report. The ship will eventually turn. Here's to hoping the tend will continue.

Jay

Posted by Jay Williams, Mortgage Loan Officer - Getting You The Right Loan (Greenville, NC) almost 9 years ago

Tim,

The builders must sense that things are stirring up.

Posted by Esko Kiuru almost 9 years ago

Casey,

Slowly but surely some progress is being made.

Posted by Esko Kiuru almost 9 years ago

Jim,

Great news from Atlanta.

 

Posted by Esko Kiuru almost 9 years ago

George,

The index does give us some feel for the housing market direction.

Posted by Esko Kiuru almost 9 years ago

Jay,

This could be a nice start, although the road probably will be bumpy for a while.

Posted by Esko Kiuru almost 9 years ago

Participate