The Washington Post

Home builders’ confidence grows in January

Framers work on the construction of a new home in a development in Carlsbad, Calif. Jan. 17, 2012. (Lenny Ignelzi/Associated Press)

Confidence among the nation’s single-family home builders rose in January for the fourth consecutive month, according to the National Association of Home Builders/ Wells Fargo Housing Market Index released Wednesday.

The survey, which asks builders about perceptions of single family home sales and about expectations going forward for the next six months, showed a four point increase in builder confidence to 25, the highest level since June 2007.

“Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region,” noted Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. “This good news comes on the heels of several months of gains in single-family housing starts and sales, and is yet another indication of the gradual but steady improvement that is beginning to take hold in an increasing number of housing markets nationwide...”

The news comes after some positive signs in the national housing market in the last month, although 2011 is a year that many in the new housing market would rather forget. New housing starts fell to the lowest level on record last year.

Most housing economists forecast a relatively flat 2012 this year, with a modest increase in the total number of home sales but little price appreciation.

In the Washington area, the forecast largely mirrors the national forecast. Much of region has fared relatively better than the rest of the country, although prices in many parts have not returned to their peak prices during 2005-2007.

From NAHB:

The NAHB/Wells Fargo index component gauging current sales rose four points to 25. The component gauging sales expectations in the next six months also rose three points, to 29 — its highest point since September 2009. And the component gauging traffic of prospective buyers rose three points to 21, its highest point since June of 2007.

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 from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. 

Related: Washington’s 2012 housing forecast



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