Don’t jump up and down over November’s rise in the HomeBuilder Sentiment Index to 20 from October’s Index of 18. The “press” has a very aggravating way of “shouting out” about things that aren’t really worthy of shouting out about. Any reading below 50 indicates that HomeBuilders have a poor outlook! 20 is waaaaay below 50!
Separately, permits for residential construction rose 10.9 percent to a seasonally adjusted annual rate of 653,000 last month (October 2011), the Commerce Department said. However, new home construction fell 0.3 percent to annual rate of 628,000 units.
Here are two articles about November’s HomeBuilder Sentiment Index:
“Confidence Up Among US Homebuilders”
Published on: Thursday, November 17, 2011
Written by: Andrea Tse
November saw a rare uptick in homebuilder sentiment that brought the index up from 18 in October to 20, its highest level since May 2010, although analysts find anything under 50 to indicate poor growth. The National Association of Home Builders (NAHB) tracks the index as a measure of future growth in homebuilding, and NAHB executives remark the numbers will stay low as long as issues like the high number of foreclosures, difficulty in securing construction financing and low buyer confidence persist. For more on this continue reading the following article from TheStreet.
Homebuilder sentiment jumped in November, according to a report from the National Association of Home Builders.
The NAHB's housing market index came in at a reading of 20 for November, bringing the index to its highest level since May 2010. Economists were expecting the index to remain unchanged from the originally reported reading of 18 in October according to Thomson One Analytics.
Still, the index remains well below 50, indicating that builders largely view the market as poor.
"While this second solid monthly gain on the builder confidence scale is encouraging, the overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing and accurate appraisals, and the restrictive lending environment that is discouraging potential buyers," said Bob Nielsen, NAHB chairman and a home builder from Reno, Nev.
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“Home builder sentiment at 1-1/2-year high in November” (2011)
WASHINGTON | Wed Nov 16, 2011 10:02am EST (Reuters)
Home-builder sentiment scaled a 1-1/2-year high in November, a survey showed on Wednesday, but conditions remain very weak to signal a turnaround in the depressed housing market.
The National Association of Home Builders/Wells Fargo Housing Market index rose three points to 20 this month, the highest level since May 2010. Economists polled by Reuters had expected the index to edge up to 18.
A reading above 50 indicates that more builders view sales conditions as good than poor and the index has not been above that level since April 2006.
"The overall measure remains quite low due to the many challenges that home building continues to face with regard to the high number of foreclosures, the difficulties of obtaining construction financing ... and the restrictive lending environment that is discouraging potential buyers," said NAHB Chairman Bob Nielsen.
All of the index's three components recorded gains in November. A measure of current sales conditions rose three points to 20, the highest level since May 2010, while a gauge of future sales expectations rose two points to 25. That was the highest reading since March.
A measure of prospective buyers rose one point to 15 -- highest since May 2010.
(Reporting by Lucia Mutikani, Editing by Chizu Nomiyama)