Interest Rate Roundup

Thursday, July 16, 2009

NAHB index climbs in July

The latest National Association of Home Builders index figures were just released. The index climbed to 17 in July from 15 in June. That was a point better than the forecast of 16 and the highest reading since September.

Behind the headlines, the sub-index that tracks present sales rose to 17 from 14, the sub-index measuring expectations about future sales held steady at 26, and the sub-index measuring buyer traffic inched up to 14 from 13. Regionally speaking, the index dropped to 16 from 19 in the Northeast, held steady at 14 in the Midwest and 15 in the West, and spiked to 20 from 15 in the South.

For some time, I've mentioned that the housing market is showing signs of stabilization. Not a healthy recovery, mind you, just an end to the cliff diving we saw in 2007 and 2008. This phase will be marked by ongoing price declines in many locales (albeit more gradual ones) ... a gradual stabilization in sales rates ... and a gradual decline in the level of inventory for sale. Speaking of the supply situation, the new home market is much farther along than the existing home market, which is still being inundated with an influx of foreclosed properties.

Again, those hoping for a robust "V"-shaped recovery are likely to be disappointed. After all, rising unemployment and tight lending standards remain significant headwinds. But relatively low mortgage rates and improved consumer sentiment are helping to offset those forces to a degree. Or in simple terms, the days of housing Armageddon are behind us.


  • Mike,
    We would all like to embrace the improvements made in the housing market, but did you see the report on rising foreclosures today? This does not support improvement, and I suspect it will get worse before it gets better.

    By Anonymous Anonymous, at July 16, 2009 at 7:52 PM  

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