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Builder confidence soars

By Judy Martel ·
Thursday, February 16, 2012
Posted: 5 pm ET

Home builder confidence in new, single-family homes soared to its highest point in four years, according to the National Association of Home Builder's survey. But it's still well below what's considered positive.

The monthly index on builder sentiment rose 4 points to 29, its highest point since 2007. Fifty is the point between positive and negative. The index measures three components: buyer traffic, current sales and sales expectations for the next six months. The component measuring sales expectations rose 6 points, the highest of the three.

David Crowe, chief economist of the builder's association, says that although the rise in confidence is a good sign, there are still several factors holding back a housing recovery, including foreclosures slowing down new home sales and appraisals that come in below the cost of construction. After delays in processing paperwork caused foreclosures to stall, Realty Trac reports that they are on the rise again, increasing 3 percent in January from a month earlier. RealtyTrac's CEO says he expects foreclosures to continue to increase in the coming months.

Potential homeowners are also having trouble qualifying for a mortgage, even though rates have been at historic lows. Applications for new mortgages and refinances dropped again this week, according to the Mortgage Bankers Association.

Spring is traditionally a busy time for home sales, which could partly account for the confidence in sales expectations. Whether it gives enough of a boost to the market to make a difference remains to be seen.

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March 03, 2012 at 6:14 am


Thank you four your nice writing on Builder confidence soars


February 23, 2012 at 4:29 am


Thank you four your nice writting on Builder confidence soars


Carl Valenzano
February 20, 2012 at 8:50 pm

Jim...while the headline may be misleading, the article does state that builder confidence is at its highest point since 2007. I see that as a sign that home builders (the few that are left) are increasingly confident that the market is stabilizing and that they may have an oppourtunity to grow their business over the next 6-12 months. I hope you will join those of us who see any indication of a return to a healthy housing as something that needs to be shouted from the top of the nearest mountain... regardless of the politics that might be in the background.

Jim Davis
February 19, 2012 at 1:29 pm

I do not understand. The housing situation is in a shambles, and you state builder confidence is up. Is this hype from the Association of Home Builders or what? Please as a building contractor, I ask you to state the truth and stop the beautiful picture thing, I am smart enough to know this is an election year and both parties want to win. Democratic or Republican, I am jaded and do not rely on predictions. Jobs need to be created and our government needs to stay out of the way. Politicians lie, cheat and steal and big business (banks) are after whatever will benefit them. Please, readers are not stupid, statistics can be manipulated to fit the situation.