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The Real Estate Bloggers

Better News – Builders Confidence Improves And Remodelers Find More Work

Posted: 15 Mar 2011 09:51 AM PDT

BuilderThe National Association of Home Builders had 2 reports of better news. The numbers are still rough enough that it is hard to call it good news, but these days any improvement is worth noting.

While new construction has been definitely hurting since the housing boom, builders are seemingly more confident than they were last month. The hope of  spring season sales is infusing the new home builders with a little more confidence. The bad news is that even though the numbers are better, they are still very negative. 50 is the magic number that tells us the industry is feeling confident in the future. The current number is 17.

Two out of three of the HMI’s component indexes held unchanged in March, including the component gauging current sales conditions (holding at 17) and the component gauging traffic of prospective buyers (holding at 12). Meanwhile, the component gauging sales expectations in the next six months rose two points in March to 27, its highest level since May 2010.

Regionally, HMI results were mixed in March. While the Northeast posted a one-point decline to 20, the Midwest held flat at 12, the South gained two points to 20 and the West gained four points to 17. via NAHB Press Release

Secondly the Remodeling Market Index has improved slightly nationally but significantly in the Midwest and the South. That indicates people are more willing to increase expenditures on their homes. Now let me preface this that the numbers have been historically low and declining since the fall of 2005. Some of these repairs may be necessary work that has accumulated.

However, anything that gets these guys working more is great news.

Current conditions indices for remodeling improved in two regions: Midwest 54.3 (from 44.9 in the third quarter) and South 45.8 (from 42.3). However, the current indices declined in the Northeast 38.8 (from 41.6) and West 39.7 (from 49.3). Future market indicators grew significantly in nearly all regions: Northeast 49.5 (from 34.0); Midwest 56.1 (from 39.4); and South 47.0 (from 37.9). Only the West region reported some decline at 39.7 (from 41.0). Major additions also expanded to 48.6 (from 45.8), but minor additions dipped slightly to 43.9 (from 46.4), while maintenance and repair stayed flat at 37.0 (from 37.1).

So what does this mean. Like the title says, better news for those in construction. What it does not mean is good news for the industry. There is very little confidence that the next quarter is going to provide work at the levels we have seen in the past and that a recovery is imminent.

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Better News – Builders Confidence Improves And Remodelers Find More Work

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