Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings December 2012

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing continued improvement in December with the composite HMI index rising to 47 while the "buyer traffic" index improved to 36, a level not seen since early 2006.

While all indicators have made truly spectacular improvements this year, it's important to note that conditions still remain fairly distressed by historic standards.

Although, looking at the data, it is fairly clear that the last few months of results indicate a major change in builder sentiment likely coming as a result of improvements in confidence given the notable rise in buyer traffic, reduced inventory and a more balanced monthly supply.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings July 2011

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing tepid increases across most measures with the composite HMI index climbing a meager two points since last month while the "buyer traffic" index remained near record lows as home builders continue to plod through the weakest activity seen in generations.

It's important to recognize that currently all measures are continuing to show epic weakness with even the strongest sentiment gain only slightly beating the level seen last year.

Clearly the new home market has seen another no-show start to the buying season with the typically strongest selling months (remember Bob Toll's analysis of the seasons) fully behind it.

The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings May 2009

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing an increase to the overall index as well as most component indices.

It’s important to recognize that although the series are seasonally adjusted, each series has generally shown notable strength or noticeable flattening during the first quarter of each of the last 4 years.

The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared.

Each component of the NAHB housing market index remains WELL BELOW the worst levels ever seen in the over 20 years and continues to remain firmly in uncharted territory.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings April 2009

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing an increase to the overall index as well as all component indices.

It’s important to recognize that although the series are seasonally adjusted, each series has generally shown notable strength or noticeable flattening during the first quarter of each of the last 4 years.

The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared.

Each component of the NAHB housing market index remains WELL BELOW the worst levels ever seen in the over 20 years and continues to remain firmly in uncharted territory.

Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings December 2007

Today, the National Association of Home Builders (NAHB) released their Housing Market Index (HMI) showing continued evidence that the new home market is experiencing a prolonged recession.

The release came along with a renewed sense of reality and some guarded, yet optimistic, outlook from Chief Economist David Seiders continues to look for an “upswing” in building activity in the second half of 2008.

“Today’s report shows that builders’ views of housing market conditions haven’t changed in the past several months, and there clearly are signs of stabilization in the HMI … At this point, many builders are bracing themselves for the winter months when home buying traditionally slows, scaling down their inventories and repositioning themselves for the time when market conditions can support an upswing in building activity – most likely by the second half of 2008.”

It’s important to understand that each component of the NAHB housing market index is now sitting at OR BELOW the worst levels ever seen in the over 20 years the data has been being compiled.

This suggests that the current severe correction has surpassed all other events seen in the last 22 years and is now firmly in uncharted territory.

Measuring builder confidence across six key data points, the builder survey has been a bellwether for the new home market since 1985.

The component measures used to formulate the overall HMI are respondent ratings on “present conditions”, “future conditions” and “buyer traffic” all of which continue to indicating significant current and future weakness as the new home market slumps its way slowly forward.

The following charts show “present conditions”, “future conditions” and “buyer traffic” both smoothed since 1986 and unadjusted since 2005 (click for larger versions).

Keep in mind that for each measure respondents are asked to assign both a “good” and “poor” rating so in each chart you will notice “good” slumping while “poor” is surging.