Home builders remained considerably downbeat as market conditions continued to erode last month, according the NAHB/Wells Fargo Housing Market Index (HMI).
The HMI fell a single point to 19, bringing it within one point of the record low 18 set in December 2007. (The series began in January 1985).
“With the HMI hovering in the historically low two-point range that’s prevailed over the past nine months, the message is very clear: The single-family housing market is still deteriorating and Congress and the Administration must move immediately to enact legislation that will help reverse the trend,” said NAHB President Sandy Dunn. “A temporary home-buyer tax credit is just the incentive that many prospective home buyers need to go forward with a purchase and help kick-start a housing and economic recovery.”
Both the House and the Senate have approved bills creating a temporary home buyer tax credit of up to $7,500 for qualified buyers, but the legislation has yet to be crafted into a comprehensive bill that can be sent to President Bush for his signature.
“Despite the Federal Reserve’s concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far. In fact, conditions have continued to deteriorate in recent times,” said NAHB Chief Economist David Seiders. “The latest HMI shows that even fewer builders now foresee market conditions improving over the next six months compared with our April survey, and builder ratings of buyer traffic through model homes also have dropped off over the past month a seasonally adjusted basis.”
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Faargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as good, fair or poor. The survey also asks builders to rate traffic of prospective buyers as either high to very high, average or low to very low.