The NAHB/Wells Fargo Housing Market Index (HMI) edged down from 15 to 14 in September. The HMI measures builder confidence in the market for newly built, single-family homes on a scale of 0 to 100.
The index has been hovering in a relatively narrow band between 13 and 16 for six consecutive months, reflecting ongoing low levels of single-family starts and builders’ perceptions that many consumers are unwilling or unable to move forward with a home purchase in today’s uncertain economic climate.
Written comments indicate that builders continue to confront challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties.
The HMI is based on a monthly survey that NAHB has been conducting for more than 20 years. The survey asks builders to rate current single-family home sales and sales expected for the next six months as “good,” “fair” or “poor;” and traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores from each component are seasonally adjusted and combined into an overall index.
In September, all three of the HMI components declined. The component gauging current sales s slipped one point to 14, while the components for expected sales and traffic each declined two points, to 17 and 11, respectively.
For more detail, including an extended history of the HMI and its components, see www.nahb.org/hmi.