Builder confidence hits 6-year high

Prospects for new-home sales reach 'good' territory for first time since the housing bust.

By Tony at MSN Real Estate Sep 18, 2012 9:09AM

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© Image Source Black/JupiterimagesFor the fifth straight month, U.S. homebuilders reported feeling more confident about home construction and the housing market, according to a report released today.


The National Association of Home Builders/Wells Fargo Housing Market Index reached 40 in September, up from a 37 rating in August and the highest reading since June 2006.

The index measures "builder perceptions" of home sales and buyer activity; a reading of 50 or higher indicates that more builders feel the market is "good" than feel it is "poor."


Of particular note is the index's component measuring builders' expectations for home sales in the next six months. In September, that reading hit 51 — the first time it has topped the "good" side since early 2007.

Today's report echoes similar sentiment from August, when NAHB chief economist David Crowe noted that housing may be back to "leading the economy out of recession." Crowe's remarks in the NAHB press release today:

Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years.

Builder Toll Brothers, for instance, has reported the "most sustained demand" it has seen in the past five years, CEO Doug Yearley said in a recent earnings call, per Bloomberg.

Yearley and Crowe, however, also said that they remain cautious in their optimism. Declining existing-home inventory, which also is keeping home prices up, may be turning more buyers toward new homes over older ones. But that may not be sustainable, considering how seasonal factors and simple housing makeup may suppress a long-term new-home boom in colder, older cities. today, for instance, reported that home-price increases have not yet hit Rust Belt cities such as Milwaukee and Toledo, Ohio — where an aging housing stock and weak job market have led to year-on-year price declines.


Regionally, all four areas tracked in the NAHB index registered a monthly increase.

  • Midwest: Up five points to 40.
  • West: Up five points to 43.
  • South: Up four points to 36.
  • Northeast: Up two points to 30.


— Tony Stasiek is a producer/editor at MSN Real Estate.


Oct 6, 2012 5:43PM

You should probably heed your own advice whatabuchofdummies. Don't know what your experience with number 3 was but I'm sure it's over exaggerated. Buying a home is a big deal, the problem is most people buy a new home, pay for the equivalent of a Honda civic and then get mad when their house isn't a Porsche 911. Lennar doesn't typically build crap (although there are certainly the occasional nightmare story with any builder) they build a product that is in line with what you pay for. Your plumbing, likely blame the fact that you can't flush your turds down the toilet because they reduced the amount of water that toilets use. You're electrical breakers tripping is not Lennar, it’s an electrical code that went into effect around 5 years ago that requires that arc fault breakers be put in at certain locations. Your smoke alarm, it’s not crap, it’s hard wired and battery backup, change the battery every six months and it won't beep. Building materials, well engineers have made remarkable progress in the past 50 years so don't be surprised if you can do more with less, doesn't mean it’s crap.

Oct 6, 2012 8:35AM
I thought stupidity ended with the general public. I was wrong. Even the homebuilders are sucking on the wrong thing and blaming Obama for their troubles. Pull your heads out and do a little research and you'll maybe find the real source. To this day, I will not buy a Lennar Home, as you will have to re-build it. Everything from the plumbing, electrical, smoke alarms and materials are crap. If you can build a home with some real value, the public would buy it. Cheap and fast doesn't sell you idiots!
Oct 6, 2012 5:50AM

I don't know what builders they are talking about. I am a developer/ home builder and i can tell you the only hope myself and other home builders in our area have, is if Obama is gone. If he is re-elected and they place 4000 more useless regulations on as they say they are. Its over. Buyers need low down payments--3%-5% or they can’t get financed. They can get those rates if the builder can front the house and then sell it to them. The only problem is the banks will not make the contractor a loan to build the house even with proof of sale. The banks will not loan on any commercial, spec. houses, sold houses, land for development


Oct 6, 2012 4:53AM

Builder confidence may be getting better, but it dosen't matter.  It only matters if the HOMEOWNER can keep up with the MORTGAGE and PROPERTY TAXES....


Bottom line:  More smear from the left.  Don't worry guys, I'll spring for the Windex when your campaign against Romney fails...


GO ROMNEY 2012!!!!




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