WASHINGTON (8/19/14)--Despite months of weak housing market numbers, homebuilder sentiment continues to improve, as the National Association of Home Builders' (NAHB) housing market index climbed 2 points this month, pushing the gauge of homebuilder confidence to its highest mark in six months (Economy.com Aug. 18).
The overall composite index rose to 55 from 53, though the regional splits weren't entirely uniform.
The Northeast and Midwest regions experienced gains, with the Midwest posting a record-high 13-point increase, while the South and West both took modest steps back.
"Today's report was another positive data point for the U.S. housing market, amidst a slow rebound from the depths of this past winter and early spring," said Gregory Bird, Moody's analyst (Economy.com Aug. 18). "The NAHB composite index has risen by 10 points in the last three months, signaling that the summer has brought about a significant change in the psyche of homebuilders."
However, while the traffic of potential buyers index also gained 3 points, the index still sits below 50, meaning that the majority of homebuilders feel that demand for housing will remain subdued in the coming months, Moody's said.
Further, both the current and future home-sales gauges climbed 2 points since the last report, but unfortunately, Moody's said, this development has not mirrored mortgage application activity, which has remained very soft throughout the year.
"Either the buyers (who) homebuilders are interacting with are planning to use cash for their acquisition or these prospective buyers are not following through with their perceived interest by applying for a mortgage," Bird said.