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Homebuilder Confidence Unchanged In May, Misses Consensus

Tyler Durden's picture




 

Hopefully the latest confirmation of the housing triple dip will not come as a surprise to anyone: “Builder
confidence has hardly budged over the past six months as persistent
concerns regarding competition from distressed property sales, lack of
production credit, inaccurate appraisals, and proposals to reduce
government support of housing have continued to cloud the outlook,” said
NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “In addition,
many builders in this month’s survey cited high gas prices as a further
contributor to consumer anxiety and reluctance to go forward with a
home purchase.” As a result, NAHB builder confidence remained at 16 in May, despite hopes and prayers that after six months at this low level for 6 months in a row.

From the NAHB press release:

Builder confidence in the market for newly built,
single-family homes held unchanged at the low level of 16 in May,
according to the National Association of Home Builders/Wells Fargo
Housing Market Index (HMI), released today. The index has now remained
at this level for six out of the past seven months. 

“Builder
confidence has hardly budged over the past six months as persistent
concerns regarding competition from distressed property sales, lack of
production credit, inaccurate appraisals, and proposals to reduce
government support of housing have continued to cloud the outlook,” said
NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “In addition,
many builders in this month’s survey cited high gas prices as a further
contributor to consumer anxiety and reluctance to go forward with a
home purchase.” 

“The HMI component index measuring traffic of
prospective buyers increased by one point for the second time this year
as prospective buyers show growing interest but remain extremely
hesitant due to a number of factors,” said NAHB Chief Economist David
Crowe. “Asked to identify reasons that potential customers are holding
back at this time, 90 percent of builders surveyed said clients are
concerned about being able to sell their existing home at a favorable
price, while 73 percent said consumers think it will be difficult for
them to get financing. Clearly, access to credit for both builders and
buyers remains a considerable obstacle to the revival of the new-homes
market.” 

Derived from a monthly survey that NAHB has been
conducting for more than 20 years, the NAHB/Wells Fargo Housing Market
Index 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
“high to very high,” “average” or “low to very low.” Scores from each
component are then used to calculate a seasonally adjusted index where
any number over 50 indicates that more builders view sales conditions as
good than poor. 

Both the index gauging current sales conditions
and the index gauging traffic of prospective buyers inched up one point
in May, to 16 and 14, respectively. While still very low, the traffic
gauge is now at its highest point since May of 2010. Meanwhile, the
index gauging sales expectations in the next six months declined two
points to 20 in May. 

Regionally, the HMI results were mixed, with
the Northeast posting a 5-point decline to 15, the Midwest posting no
change at 14, the South posting a one-point gain to 16, and the West
posting a two-point decline to 16.

 

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Mon, 05/16/2011 - 10:14 | 1279019 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Lots of bad news today....bullish!!!!

Mon, 05/16/2011 - 11:01 | 1279195 Oracle of Kypseli
Oracle of Kypseli's picture

At the moment, house prices are much much lower than you can build. Some are as low as the price of land. And...the overshooting downwards is continuing.

I see why the home builders have changed their model and are trying to make money trading land and buying/selling foreclosed houses. 

However, there are still house buyers who emotionally want a house and block-out the details.

Mon, 05/16/2011 - 10:22 | 1279054 SheepDog-One
SheepDog-One's picture

Homebuilders...why should they feel a lack of confidence? Bernank keeps bailing them out no matter what.

Mon, 05/16/2011 - 10:50 | 1279152 baby_BLYTHE
baby_BLYTHE's picture

and no one is stopping him.

The only people that seem to give a flying f*** are people my age. Even though I haven't presonally met any, myself.+

Luke Rudkowski from WeAreChange confronted the chairsatan, Ben S Bernanke, last week at an elistist cocktail party. This guy has balls!

http://www.youtube.com/watch?v=4AcpznV4RGY

Mon, 05/16/2011 - 11:19 | 1279256 john39
john39's picture

I saw that vid, but something just doesn't sit right about this. Seems set up to me. You try and stroll up to the bernanke to ask that kind a question, and see what happens... frankly, this looks the banker cartel moving the plan to the next stage. they let the fed collapse, and use it as a scapegoat to bring in the next stage- austerity ushered in by Ron Paul. They always think that they are 3 steps ahead of the masses, and frankly, for the most part its true.

Mon, 05/16/2011 - 11:53 | 1279400 baby_BLYTHE
baby_BLYTHE's picture

I don't agree with the video being a 'set-up' even though I believe WeAreChange to be a questionable organization (potential funraising fraud).

If you believe that video to be fraudulent, perhaps this one might change your mind. The Bernank confronted in Chicago. I have met Steve from WeAreChange Chicago. He is a decent dude.

http://www.youtube.com/watch?v=AVjIQllKRgs

Mon, 05/16/2011 - 10:23 | 1279064 depression
depression's picture

Damn Weather is killing this economy.

Mon, 05/16/2011 - 10:34 | 1279091 Racer
Racer's picture

And as usual total disconnect regards to reality.... the rich getting even richer in stocks v the poor peasants who are losing their homes, their jobs and now their pensions

Mon, 05/16/2011 - 11:02 | 1279104 Boxed Merlot
Boxed Merlot's picture

90 percent of builders surveyed said clients are concerned about being able to sell their existing home at a favorable price, while 73 percent said consumers think it will be difficult for them to get financing. Clearly, access to credit for both builders and buyers remains a considerable obstacle...

All this while the system has the largest accumulation of frns EVER in existence. Best I can tell, Nobody has yet started physically burning their bennybucks so tell me again why the piper's no longer playing

Time for the US to get off the frn / tribute paying drug and begin the transfusion / issuance of non interest bearing, legal tender US notes to purge the system of the cancerous foreign bodies in our circulatory system. Pump all fiat back in the cadaverous fed / imf / bis systems and let them evaporate into the ether world they were conjured up from to begin with.

The US notes the treasury dept. issues will be backed by the same gf&c the fed finds so attractive in the tribute paying timmybills with the added benefit of a constitutionally mandated and fulfilled role of being redeemable in intrinsically valuable coinage.

That is, if adults were actually in charge of our government anymore.

What am I thinking? Far be it anything remotely resembling sanity would ever show up in the US again. Dance On, Idols! (even if the music's no longer playing)

Mon, 05/16/2011 - 10:56 | 1279178 AcidRastaHead
AcidRastaHead's picture

a home builder from Reno, Nev. “In addition, many builders in this month’s survey cited high gas prices as a further contributor to consumer anxiety and reluctance to go forward with a home purchase.”

Damn, if only crude was under $100 then the housing industry would pick-up.

Mon, 05/16/2011 - 11:08 | 1279225 DaveyJones
DaveyJones's picture

gas prices are definitely a factor for sub and exurb expansion

Mon, 05/16/2011 - 13:47 | 1279862 AcidRastaHead
AcidRastaHead's picture

So is snow.  Surprised it wasn't mentioned.

Mon, 05/16/2011 - 11:15 | 1279255 Math Man
Math Man's picture

Housing shortage starting in 2012/13.  You're already starting to see it as rental rates creep up and vacancies creep down.

Too much underbuilding relative to US population growth since 2006. 

GDP contribution from residential construction under 3% vs 6% historically means we'll be off to the races soon bitchez.

Next leg of the recovery to be led by residential construction...  especially as oil falls back to $75 and people can afford to buy shit again.

Mon, 05/16/2011 - 11:46 | 1279372 piceridu
piceridu's picture

are you related to Texas Gunslinger?

Mon, 05/16/2011 - 15:38 | 1280319 Slim
Slim's picture

Bring the shadow inventory to market.  How about the many many condos being held off market so they can try to support pricing?  We have plenty of residences for people especially at the lower levels of household formation today.  The issue is that while traditional rental property is getting a bit more full - we have tons of potential rentals not being sold into the market or rented.  Any uptick in the national rental stats is an impact of the purposeful supply manipulation going on to control supply/demand equilibrium for home prices.  You bring this crap to market, the marginal rental pressure ends instantly.

Mon, 05/16/2011 - 12:01 | 1279441 PulauHantu29
PulauHantu29's picture

"Very, very bullish for the markets. Should push GDP higher," Wall Street Spin consensus.

BOOYAAH!!!!!!!!!!!!!!!!!!!!!!

Mon, 05/16/2011 - 12:10 | 1279465 Caveman93
Caveman93's picture

Makes sense since I stopped doing all construction lending in January and then lost my job in March. No one is there to lend to build. Very bullish indeed!

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