Builder confidence in the market for new, single-family homes rose significantly in April as consumers took advantage of home buyer tax credits scheduled expire at the end of the month, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The HMI was up four points to 19 in April, its highest level since September of 2009.
"Home builders reported some real improvement in current sales activity and traffic of prospective buyers through their model homes over the past month," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, MI. "While we remain cautious about what future months will bring, it's great to have this positive momentum at the start of the spring home buying season."
"An expected surge in buyer activity leading up to the expiration of the home buyer tax credits and a gradually improving economy helped to brighten builders' view of the marketplace in April," explained NAHB Chief Economist David Crowe. "Meanwhile, builders have a more neutral view of what may come in the next six months, and are very aware of the many factors that continue to drag on housing at this time - including the critical shortage of credit for new and existing projects, problems with inaccurate appraisals, and the ongoing flow of foreclosed properties on the market. Greater economic growth, particularly in the job market, and the abatement of these housing issues are needed to help move home building to a more sustained recovery."
NAHB has been conducting a monthly survey of builder confidence for more than 20 years. The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average," or "low to very low." Scores for each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
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