Home builder confidence in the market for newly built single-family homes remains poor, as the August index value for the National Association of Home Builders/Wells Fargo Housing Market Index was unchanged from July's 15.
If the value is above 50, the home builders' outlook is positive. The HMI for August 2010 was 13.
Aside from the well known issues or complaints such as large inventory of distressed homes on the market, inaccurate appraisal values, plus buyers not being able to qualify for favorable mortgage rates because of overly tight underwriting requirements affecting the outlook, NAHB chairman Bob Nielsen said 41% of respondents to a special questions section of the HMI indicated they had lost sales contracts due to buyers' inability to sell their current homes.
NAHB chief economist David Crowe added "The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time. While buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey."
HMI is made up of three components. The component gauging current sales conditions gained one point to 16, its highest level since March of this year. The component gauging traffic of prospect buyers rose one point to 13 following two consecutive months at 12.
However, the component gauging sales expectations for the next six months declined two points to 19.
By region, the Northeast had the best outlook from its builders at 19, up four points, while at the other end of the spectrum, the Midwest declined two points to 10.
