Homebuilder Confidence Spikes Back To Highest In 8 Years

Tyler Durden's picture


Despite higher rates, collapsing mortgage applications, lower affordability, and fast money exiting the market, the NAR just won't back off their exuberant optimism that it will all end well. With the biggest beat of expectations in 7 months, the NAHB sentiment index re-spiked back to 58 - levels not seens since November 2005. Only the NorthEast saw prospective buyer traffic drop notably (we are sto be blamed on the weather) as the survey saw a surge in the single-family-home-sales sub-index.

Yay - 8 year highs in optimism...


Seems a little overdone...

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Tue, 12/17/2013 - 11:14 | 4253934 Headbanger
Headbanger's picture

Sure, why not!?

Tue, 12/17/2013 - 11:19 | 4253943 nickels
nickels's picture

Good to hear. For a while there I thought we were living in a fool's paradise.

Tue, 12/17/2013 - 11:43 | 4254005 Sudden Debt
Sudden Debt's picture

Obama's USA you mean?

Tue, 12/17/2013 - 11:35 | 4253988 Sudden Debt
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Tue, 12/17/2013 - 11:22 | 4253940 maskone909
maskone909's picture

home builder confidence?  WTF does that even mean?  KBH downtrend last 6 months


even stock prices arnt an acurate expression of sentiment. 

Tue, 12/17/2013 - 11:44 | 4254002 SunRise
SunRise's picture

It means somebody is about to lose their shirt and the stuff holding the hot air under their shirt.  Naked Confidence in the face of a Great White is false confidence, because Great Whites love those scintillating, frothy, red bubbles.

Tue, 12/17/2013 - 12:35 | 4254108 Harbanger
Harbanger's picture

"home builder confidence?  WTF does that even mean? "

Well builders speculate and finance their projects, the buyers then finance the homes they buy.  So I would say the "confidence" is based on anticipation of easier lending standards going forward.

Tue, 12/17/2013 - 16:05 | 4254803 Nothing but the...
Nothing but the truth.'s picture

The NAR have learnt well, from the fudging excercises of all the government departments. But with these best  in 8 years bullshit figures ,they have outshone their government counterparts.

Tue, 12/17/2013 - 11:18 | 4253947 Everybodys All ...
Everybodys All American's picture

I'll take meaningless numbers for 100 Alex.

Tue, 12/17/2013 - 12:17 | 4254130 Kaiser Sousa
Kaiser Sousa's picture

"For any of you thinking that your underwater mortgage is now covered by the value of your home or for those who were thinking they would take advantage of the housing market "recovery" and sell, you better take a look at facts.  The facts are not what is being reported to you by the Government, Wall Street or the various housing industry associations.  The facts are what you have to dredge up by wading the through the details of housing market reports. You have to go well beneath the surface of the headline media reports and fluffed up news broadcast sound-bytes.

How do I know this?  Because I look at the actual data that is being reported by homebuilders.  Not the glossed up b.s. they present to the public at large but the actual data buried in the bowels of their SEC filings.  To begin with, the upper management of just about every single publicly traded homebuilder has been dumping stock en masse.  They are not buying their shares.  They are either taking their stock and option bonus awards - which get filed as a purchase - and dumping them as soon as they are allowed by law or they are dumping shares outright.  I publicly challenged an official at Pulte Homes to have himself and his management cronies take after-tax cash from their bank accounts and buy shares outright.  That was about two months ago. Not only did he not get back to me but, in fact, insiders there are dumping.  Look for yourself:  Stock Bonus At Zero Cost Dumped At $18.35.  They are ALL doing this."



Tue, 12/17/2013 - 12:27 | 4254158 Oldwood
Oldwood's picture

They are just feeling guilty about hoarding all that "prime" investment. They are spreading the wealth around.

Tue, 12/17/2013 - 12:28 | 4254164 Shad_ow
Shad_ow's picture

I'll take "lies" for $800 Alex.

Tue, 12/17/2013 - 11:20 | 4253948 slotmouth
slotmouth's picture

Rates are going down after negative tapering.  If a housing bubble and low rates got us into this mess, then we need an even more massive housing bubble and lower rates to get us out.

Tue, 12/17/2013 - 11:40 | 4254001 moneybots
moneybots's picture

"Rates are going down after negative tapering.  If a housing bubble and low rates got us into this mess, then we need an even more massive housing bubble and lower rates to get us out."


That just digs a deeper hole.

Tue, 12/17/2013 - 11:22 | 4253949 MFLTucson
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Tue, 12/17/2013 - 11:24 | 4253952 Poundsand
Poundsand's picture

As a builder I mentioned back in '09 that this was like sitting at a table playing Texas no hold 'em.  There was a big push to build as builders saw their pile dwindling and realized that in a few more hands, unless they bet what they had, they'd be run out by the blinds.

This is just the next round of players who weathered the original crash and tried to hang on.  I couldn't, am an no longer a builder.  But I know a lot of guys who are now playing those weak hands hoping for a miracle.  Unfortunately, there just isn't enough work but for the very, very few.

Tue, 12/17/2013 - 11:34 | 4253976 maskone909
maskone909's picture

and that my friend is a great summation of the current state of economics.  the FED and friends are DRAINING the life out of everyone who isnt connected.  this is a slow death supported by bogus numbers, fake economists, snap cards, and the MSM. 

Tue, 12/17/2013 - 12:13 | 4253981 LawsofPhysics
LawsofPhysics's picture

Great summary of the honest state of things.  Now start building something useful like guillotines.

Tue, 12/17/2013 - 11:42 | 4254004 Seasmoke
Seasmoke's picture

Yes. You always want to have a strong hand, when the weak hands have no choice but to go all in. Those blinds will kill you. Or the big shark will kill you. 

Tue, 12/17/2013 - 12:02 | 4254070 Oldwood
Oldwood's picture

The first wave of business failures were those of the highest confidence standing on the longest limbs. Less bullish businesses had kept some of their powder dry for just such occasions. Most of us have weathered downturns before and initially saw this one as all the rest...hunker down for a year, invest in our businesses while it was cheap to do so and be staged for the eventual recovery. Since then we have seen false start after false start and each time it takes a few more out. Regardless of fundamentals, when the dog gets kicked every time he goes for the food bowl, he is eventually going to give up and look elsewhere or starve. By not letting this mess reset initially, we now have a mentality in place where the future is murky at best so we are setting on what we have left in anticipation of the worst. The economy cannot survive under these conditions. As much as we all understand the massive corruption and unpayable debt, a little optimism would go a long way but they have killed it for all but the most desperate or corrupt,and guess what, corruption is now the only game in town.

Tue, 12/17/2013 - 12:28 | 4254166 Harbanger
Harbanger's picture

In the big cities on the coasts and in DC, new Building projects are actually on the rise.  The small spec builders that finance their projects with contruction loans have been very bearish, but the big money is dumping their hoards into real estate projects like the cash is on fire.

Tue, 12/17/2013 - 16:11 | 4254825 fallout11
fallout11's picture

Harbanger is at least partially correct, currently a lot of builders are building "for the banks", and for venture capital increasingly looking for revenue streams (rents, mainly). Doesn't matter that the market is already oversaturated or not, when you are a hammer everything looks like a nail. 

Tue, 12/17/2013 - 16:33 | 4254936 SDShack
SDShack's picture

China built lots of ghost cities too.

Tue, 12/17/2013 - 11:23 | 4253953 buzzsaw99
buzzsaw99's picture

confidence may be high but single family starts are still low

Tue, 12/17/2013 - 11:26 | 4253961 earnulf
earnulf's picture

So sales are rising but applications are falling?   Serious disconnect in May 2013 per that chart.    Several new subdivisions (SFH) in my area are desolated lots of weeds and all homes are trying to sell with no buyers.   Meanwhile the rental units and condos are exploding just to the south.     Awful lot of homes on the market right now and few short sells being advertised.   600 days on the market is not unusual.

Tue, 12/17/2013 - 16:37 | 4254945 SDShack
SDShack's picture

100% cash buys. That's what most sales are now. All that Fed liquidity gowing to TPTB is being used to buy real assets, mostly as rental properties. Especially since many people, even with good credit, can't qualify for a mortgage because they have no job and no income. Plus a lot of those buyers are NOT from the USA, many from China... just like Japan back in the 80's & 90's.

Tue, 12/17/2013 - 11:36 | 4253982 Ajax4Hire
Ajax4Hire's picture

Two-2 items of note:

1) Construction of 24 homes began 6 months ago on a small sub-division of land near my house that has sat fallow for 5 years.  Today only two-2 have been sold/occupied (I can not count a sale unless the owners move in).  These are 2200sqft box houses going for $170k.  Not much profit in that ratio.  (location: suburb of Atlanta, GA).

2) if the data can be believed, single-family house sales are UP, mortgage applications are DOWN.  This means purchased with cash which means big money which means target for rental market.

We use to buy to own.  Now we rent to death.  Anyone with math skills knows that renting furniture/TV/appliances is a terrible deal for the renter (Amazing, wonderful, fantastic deal for the owner).

Tue, 12/17/2013 - 15:16 | 4254673 edifice
edifice's picture

There can be plenty of advantages to renting, if you're smart about it.  I pay $500/mo. rent, plus half the utilities (total to the landlord equals about $700/mo.)  This lets me live in a very nice suburban neighborhood, with complete access to the ~2000 sq. ft. house (he lives there, too), without all of the hassle of "owning" the house.  If something breaks, its his problem.  Works out great, been there for several years, now.

Tue, 12/17/2013 - 11:37 | 4253993 Seasmoke
Seasmoke's picture

I was hoping to build a new house in Camden today. But it's cold outside. I will wait until Summer. (Unless it's too hot outside)

Tue, 12/17/2013 - 11:49 | 4254027 TheFourthStooge-ing
TheFourthStooge-ing's picture

NAHB: "Moar Groath in Camden!!! GROATH!!!"

Tue, 12/17/2013 - 11:39 | 4253995 moneybots
moneybots's picture

"...the NAR just won't back off their exuberant optimism that it will all end well."


To the NAR, there is never a badtime to buy a house.

Tue, 12/17/2013 - 11:48 | 4254028 orangegeek
orangegeek's picture

The NAHB's mission is to "enhance the climate for housing and the building industry".


NAHB is a marketing firm - and this is a survey that this marketing firm did to pump the industry.


Philly Housing Index is an index of builders' stock prices - and is been correcting for months - readying for the next move down.




There is no housing recovery.  2005 peak won't be repeated for decades.

Tue, 12/17/2013 - 11:58 | 4254061 Apply Force
Apply Force's picture

2005 peak won't happen ever again - there is not the juice in the system to support it.  Our continually debased currency is bound not by debt but by energy available.  Less energy, less calories, less people - the trend is less.

Tue, 12/17/2013 - 11:51 | 4254035 auntiesocial
auntiesocial's picture

now take out all of the foreign currency all cash buyer deals... the only thing that makes any sense it that they are putting renters in these properties. no way in hell these are mom and pop 80/20's

Tue, 12/17/2013 - 12:02 | 4254065 1835jackson
1835jackson's picture

USA is becoming a nation of renters. It really is that simple. Huge amounts of wealth switched hands after 2008. This is the aftermath. And no amount of make up can make this pig better looking. A pig, is a pig, is a pig!

Tue, 12/17/2013 - 12:22 | 4254142 ToNYC
ToNYC's picture

Smoking delusional FED substances, or busy dying.

Tue, 12/17/2013 - 13:48 | 4254453 Dr_NO
Dr_NO's picture

1. Banks buy all the New Houses

2. Set them up with a rental company

3. Create CRO's

4. ????

5. 2008 Again

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