Interest Rate Roundup

Monday, December 17, 2007

NAHB rallying cry: Things aren't getting worse!

Okay, so maybe it's not the most inspiring call to arms. But I think it's appropriate for the National Association of Home Builders, which just released its latest builder sentiment survey. What did the report show?

* The overall housing market index stayed flat at 19 in December -- the third month in a row it has held at these record-low levels.

* Two of three sub-indices gained. The index measuring present sales ticked up to 19 from 18 in November, while the index measuring expectations for future sales climbed to 26 from 24. However, the index measuring prospective buyer traffic fell to a fresh low of 14 from 17 a month earlier.

* Speaking of buyer traffic, it dropped sharply in the Northeast (to 19 from 26) and held steady in the West (at 18). It climbed in the South (to 21 from 19) and and in the Midwest (to 15 from 13).

The big-picture problems remain the same for the home building industry: There's too much housing supply and not enough housing demand. That's keeping the pressure on new home builders and existing home sellers. If there's a silver lining on this dark cloud, it's that builder sentiment isn't getting worse. But that doesn't exactly get the home town fans to jump up and cheer, does it?

We'll get more important housing data tomorrow when the government releases figures on home construction. Housing starts are forecast to have dropped just over 4% between October and November to an annualized rate of 1.176 million units.


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