August 17, 2009

Home builder confidence rises slightly

The National Association of Home Builders said builder confidence rose in August to the highest level in more than a year.

The monthly Housing Market Index released Monday gained 2 points over July to reach 18, NAHB said.

The index has a long way to go before a majority of builders rate conditions as good -- any figure above the break-even point of 50 on the index. Nonetheless, 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, NAHB Chief Economist David Crowe said.

The question is what happen after that -- whether there will be enough momentum to keep us moving toward a recovery, NAHB Chairman Joe Robson said.

Robson pointed to 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.

The group's headline index jumped 8 points to 25 in the Northeast. In the West the index gained three points to 17. In the South the index dropped on point to 18. In the Midwest, the index rose two points to 16, NAHB said.