Contractors remain cautiously optimistic about the housing market, according to data released today by the National Association of Home Builders which shows that overall builder confidence remains at a five-year high.
“While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving,” said Barry Rutenberg, chairman of the National Association of Home Builders, which publishes a monthly Housing Market Index or HMI. The overall index remained unchanged for the month of March, but the component measuring expectations for sales over the next six months is at a four-year high.
“Builder confidence is now twice as strong as it was six months ago,” said David Crowe, NAHB chief economist. “That said, many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in come markets.”
The latest housing news may be cheering builders, but their growing optimism does not appear to be spreading to American homeowners. More than 30 percent of 1,100 investors surveyed in January say their home has lost more than 20 percent of its value in the last five years. One-third say their home has lost between 10 percent and 20 percent of its value, and more than 20 percent say their home has lost under10 percent.
The NAHB index is the first of five housing news reports due out this week. Tomorrow, the Commerce Department is schedule to release its monthly report on new home construction. In February, the department report that housing starts notched up 1.5 percent from December to January and were 9.9 percent higher than January of 2011.
In other housing news scheduled for release this week, the National Association of Realtors, an industry group, will report on Wednesday existing home sales for the month of February. The group reported a 4.3 percent increase in total existing home sales from December to January. The increase contributed to gains in three of the past four months, a sign that buyers are beginning to take advantage of record affordability in the housing market, according to Lawrence Yun, the association’s chief economist.
Thursday’s housing news will come from the Federal Housing Finance Authority, or FHFA, which will release its monthly House Price Index. A fourth-quarter report released by the FHFA in February showed a slight decline of 0.1 percent in housing prices from the third quarter, and a year-over-year decline of 2.4 percent.
Friday, the Commerce Department will release its monthly report on New Home Sales. Last month, the department reported that sales of new single-family homes fell 0.9 percent from December to January, but rose 3.5 percent from January of 2011. The median sales price was $217,000, and the average sales price was $261,000.