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Builders' View on Housing Brightens

Monday, January 29, 2018   /   by Sean Zanganeh

Builders' View on Housing Brightens

A measure of home-builder sentiment rose this month, offering another possible sign that the housing market is beginning to stabilize.

The National Association of Home Builders/Wells Fargo Housing Market Index, which is based on a survey of home builders' perceptions about the housing market, rose to 14 in April from 9 in March following months of dismal readings. Partly driving the unexpectedly large rise this month was the builders' brightening outlook for sales over the next six months.

Builders said in recent weeks that sales have been improving because of low mortgage rates and government efforts to spur purchases by first-time buyers, such as an $8,000 tax credit.

The rise in the NAHB index, which is seasonally adjusted to account for the typical uptick in spring sales, follows other signs that the market is nearing a bottom, including a rise in existing and new home sales and single family housing permits in February. Some analysts said Pulte Home Inc.'s recent acquisition of Centex Corp., to form the nation's largest home-building company, may have been partly driven by a belief that the market was bottoming.

"We have a lot of little signals here and there that there has been a bottoming in sales," says David Crowe, the NAHB's chief economist.

The shares of some battered home builders rose as much as 20% on Wednesday, but many analysts warned that the optimism may prove short-lived if banks dump additional foreclosed houses on the market at steep discounts and unemployment worsens.


Sean Zanganeh

Prudential California Realty

Real Estate Consultant & Notary Public

ph# 858.229.6063

Email: sean.zanganeh@gmail.com

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