Builder confidence within the home building market remained steady at 19 in December – its third straight month at that level, which is the lowest reading since the National Association of Home Builders began recording confidence figures in January 1985.
A reading of 50 indicates average confidence.
“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,” said NAHB Chief Economist David Seiders. “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.”
The index gauging current sales conditions for single-family homes improved by a single point to 19, and the index gauging sales expectations for the next six months rose two points to 26. Meanwhile, the index gauging traffic of prospective buyers declined three points to 14.
Regionally, the HMI results were mixed in December. The Midwest and South each posted two-point gains in their HMI readings, to 15 and 21, respectively. The West held even at 18, and the Northeast, which experienced wetter weather conditions than normal in the survey period, posted a seven-point decline to 19. All regions were down on a year-over-year basis.
The U.S. Department of Commerce reported that housing construction fell in November and that single-family activity dropped to the lowest level in more than 16 years. Construction of new homes and apartments dropped by 3.7 percent last month to a seasonally adjusted annual rate of 1.187 million units.
Construction of single-family homes fell by 5.5 percent to an annual rate of 829,000 units, the lowest level since April 1991, while multi-family construction was up 4.4 percent to an annual rate of 332,000 units.
Applications for building permits fell for a sixth straight month, dropping by 1.5 percent to a seasonally adjusted annual rate of 1.15 million units, the slowest pace for building permits since June 1993. The overall construction decline left home building 24.2 percent below the level of activity a year ago.