Category Archives: home builder confidence

Fewer Housing Starts in March – Building Permit Approvals Up

Posted on April 17, 2012 by admin

March 2012 housing starts for privately owned housing dropped to 654,000 or 5.8% below February housing starts of 694,000. On a year-over-year basis, the March 2012 rate is 10.3 percent above March 2011 figures of 593,000 units. Housing starts for the single-family home component of the indicator decrease to 462,000 or 0.2 percent in March as compared to the revised rate of 463,000 for the prior month. Apartment buildings with five or more apartments, which includes townhouses, recorded an annual rate of 178,000. Building Permits The news for build permit authorization provides a dose of hope for a housing recovery to take place. The housing permit rates increased 4.5% higher than the revised authorization rate of 715,004 February —the highest rate since September 2008. Analysts predicted a decline to an annual rate of 710,000. This figure increased 30.1% higher than the 574,000 rate recorded for March of last year. Single-family home permit approvals dropped to an annual rate of 462,000 or 3.5% below the revised February rate – 479,000. Single-family homes make up 70 percent of building permit authorizations.  Municipal building departments issued permits for buildings, with five or more apartments, at a rate of 262,000. Housing Completions The 600,000 rate for the number homes completed in March registers 4.2 percent below the revised February numbers of 576,000, but more than 0.5% above March 2011 rate (577,000). A rate of 440,000 single-family homes completions in March registered 1.4 percent more over than the revised February number (479,000). The rate of completion for apartment buildings with at least five dwelling units registered 262,000. The housing market showed signs of rebounding late last year on through February. The market has a difficult road to climb out of a depressed construction market. Builders’ confidence fell last month, which represents the first drop since September 2011. About Housing Starts The housing starts report or  New Residential Construction Report   represents a joint effort between the U.S. Census Bureau and U.S. Department of Housing and Urban Development. Each month, these agencies poll homebuilders from across the nation to gather data on homebuilding activities. The metrics measure housing starts, building permits and housing completions. Data measures construction activities from four regions: Northeast, Midwest, South and West, which enable users to focus on regional variances. Housing starts and building permits rates represent a percentage change from the previous month and a year-to-year basis. The agencies adjust data to account for seasonal and non-seasonal variations. The new construction market has to deal with competition from heavily discounted foreclosures, short sales and existing homes sales, which offer better bargains to homebuyers. New home sales account for 20 percent of the home market. According to the National Association of Home Builders, a single new home creates three jobs for 12 months and produces around $90,000 in taxes for the economy. Continue reading →

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Home Builder Confidence Increases in January

Posted on February 16, 2012 by admin

The National Association of Home Builders (NAHB) and Wells Fargo today released their monthly Housing Market Index (HMI) results that demonstrate that builder confidence in the market went from 24 points to 29.  The four-point increase represents the fifth month in a row that the HMI has increased.  This is the highest level the index has reached since 2007. Despite the increase, home builder confidence is low by historical measures.  A score of 50 or above means that more builders see the market as good rather than poor.  Nevertheless, the index has doubled since September 2011, when it was as low as 14.  It hit its all-time low of 8 in January 2009.  So this month’s score is an indicator that builders see the housing market’s growth as sustainable. What the Index Measures: For more than 20 years, the HMI has been generated by a monthly survey that the NAHB conducts by researching home builders’ confidence in the housing market.  Builders are asked to evaluate current single-family home sales and upcoming sales for the next six months as “good,” “fair,” or “poor.” The builders also rate the number of prospective buyers as “high,” “average,” or “low.” The scores are compiled to arrive at the HMI figure. The HMI consists of three components, which all increased for the February report.  The rate of prospective buyers increased from 21 to 22 while the measure of sales expectations for the next six months went from 29 to 34. Current sales increased from 25 to 30.  Home builders in the western U.S. had the most positive views, with an index of 44, the highest since 2006.  Positive sentiment declined in the Northeast and South, but rose to a rate of 30 in the Midwest. Why Consumers Care: The house building sector of the economy was one of the hardest hit by the recession and has been one of the slowest to recover; however, its health can be an indicator of the state of the economy as a whole. Since the HMI measures builders’ sentiments about the housing market, it is a good measure of the present state of the real estate market as well as a predictor of the future. Home sales are an important sector of the economy and a gauge of consumers’ confidence – since only economically secure people decide to purchase homes.  When consumers purchase homes, they generate income for realtors and sellers – and usually acquire goods and services, such as large appliances and cleaning services, which have a ripple effect on the economy. Investors also use such indices as a means of making investment decisions and the information often has a direct impact on the prices of stocks, bonds, and commodities. Continue reading →

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