Builder confidence in newly built,
single-family homes is on the rise according to the National Association of
Home Builders and the Wells Fargo Housing Market Index. The index rose one
point in August to its highest level in more than a year, according to the
NAHB. Building on a two-point gain in July, the HMI reached 18 this month, its
highest point since June of 2008.
”Home builder expectations
have been buoyed by the success of the first-time home buyer tax credit and its
anticipated boost to buying activity leading up to the Nov. 30 expiration date,”
said NAHB Chairman Joe Robson, a home builder from Tulsa, Okla. “The question
is what happens after that - whether there will be enough momentum to keep us
moving toward a recovery, particularly in light of significant headwinds such
as the severe credit crunch for housing production loans and inappropriate
appraisal practices that are scuttling a quarter of all new-home sales. Unless Congress
and the Administration focus their attention on housing right now, this
improvement may well be short-lived.”
”One very positive
aspect of today’s report is the big gain registered in the component gauging
home builders’ expectations for the next six months,” said NAHB chief economist
David Crowe. “This reflects anticipated sales stemming from the tax credit as
well as recent signs that an economic recovery has begun. There is definitely a
sense of hope among builders that the worst of the downturn is over and that a
turning point is near at hand. Meaningful action by Congress could ensure that
this upward momentum continues and that housing can help push the economy back
onto solid ground.”
NAHB is calling on Congress to extend
the first-time home buyer tax credit for another year and to offer it to all
income-eligible buyers. In addition, NAHB is urging Congress to help eliminate
the credit crunch, correct faulty appraisal practices and expand net operating
loss tax provisions in an effort to help avoid more layoffs.
