After a doom-and-gloom June, confidence rose slightly among U.S. home builders in July, according to a report released today by the National Association of Home Builders. The Housing Market Index, which gauges builder perception of the single-family market, rose 2 points to 15, but remains far below 50, the number indicating a positive outlook.
The index has hovered between 13 and 17 in every month since June 2010, and last exceeded 50 in April 2006. Bob Nielsen, chairman of the association, attributed another month of low confidence levels among home builders to the competition from low-priced foreclosed properties, inaccurate appraisals of new homes and the restrictive lending environment.
“We view the upward movement in the July HMI as a correction from an exceptionally weak number in June that was at least partly attributable to negative economic news and the close of a disappointing spring selling season,” said David Crowe, chief economist of the NAHB. “The strong rebound in sales expectations for the next six months likewise marks a return to trend. Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve.”
Specifically, the southern states showed the most confidence, as the index rose three points to 17 in July from a month prior. — Adam Fusfeld