Housing Market Index Falls Two Points in April

Apr 16, 2001, 01:00 ET from National Association of Home Builders

    WASHINGTON, April 16 /PRNewswire/ -- Weakening job markets and lower
 consumer confidence likely contributed to a two-point decline in the National
 Association of Home Builders' Housing Market Index (HMI), released today. The
 HMI, which was revised downward one point to 58 in March, fell to 56 in April,
 the lowest reading since January.
     "With long-term mortgage rates hovering around 7 percent, the financing
 climate for home purchases remains very good," said Bruce Smith, a home
 builder from Walnut Creek, Calif., and NAHB president. "However, recent signs
 of continued weakening in the broader economy -- including higher unemployment
 figures and the University of Michigan's report showing lower consumer
 sentiment for early April -- have likely played a role in builders lowering
 their assessments of current home sales and expected sales in the next six
 months."
     The HMI is derived from a monthly survey of builders that NAHB has been
 conducting for nearly 20 years. Home builders are asked to rate current sales
 of single-family homes and sales expectations for the next six months as
 "good," "fair," or "poor." They are also asked to rate traffic of prospective
 buyers as either "high to very high," "average" or "low to very low." Scores
 for responses to each component are used to calculate a seasonally adjusted
 overall index, where any number over 50 indicates that more builders view
 sales conditions as good than poor.
     Two out of three of the HMI's component indexes declined in April. The
 index for current single-family home sales and the index gauging expected
 sales in the next six months each dropped four points, to 62 and 63,
 respectively. Meanwhile, the index gauging traffic of prospective buyers rose
 three points to 41 in April.
     "While significant strength remains in the overall housing market," said
 Smith, "builders are perceiving a bit more hesitancy among potential buyers.
 People are out there looking, but some are less likely to commit in the face
 of current economic conditions."
     About NAHB: The National Association of Home Builders is a Washington-
 based trade association representing more than 203,000 member firms and
 professionals involved in home building, remodeling, multifamily construction,
 property management, subcontracting, design, housing finance, building product
 manufacturing and other aspects of residential and light commercial
 construction. Known as "the voice of the housing industry," NAHB is affiliated
 with more than 800 state and local home builders associations around the
 country. NAHB's builder members will construct about 80 percent of the more
 than 1.5 million new housing units projected for 2001. During a typical year,
 residential construction accounts for about five cents of every dollar spent
 in the U.S. economy, making home building one of the largest and most
 influential industries in the country.
 
                     Housing Market Index (Historical data)
                             (Seasonally Adjusted)
 
                   Jan   Feb  Mar   Apr  May Jun  Jul Aug  Sep Oct  Nov  Dec
     1985           49    57   55    48   51  54   58  59   56  59   58   57
     1986           57    54   57    62   64  66   60  57   57  65   59   63
     1987           63    60   60    59   56  56   55  54   53  50   55   51
     1988           52    51   51    53   55  49   54  56   53  48   56   60
     1989           53    54   48    42   44  46   46  50   51  48   44   44
     1990           41    44   39    37   35  36   33  31   32  30   27   27
     1991           21    26   35    40   39  42   41  36   38  38   37   37
     1992           43    49   46    46   47  46   47  49   49  50   52   55
     1993           53    51   54    52   52  53   58  61   63  67   68   70
     1994           66    64   62    62   60  57   55  54   51  50   48   43
     1995           38    41   39    38   42  45   51  53   53  57   50   52
     1996           51    50   60    60   63  61   60  57   56  55   51   53
     1997           52    54   58    56   55  57   56  58   59  58   56   59
     1998           59    68   67    67   68  71   72  71   71  73   78   78
     1999           76    73   70    70   76  77   74  72   73  70   73   72
     2000           71    69   61    62   62  57   58  61   61  63   65   58
     2001           55    57   58    56
 
 

SOURCE National Association of Home Builders
    WASHINGTON, April 16 /PRNewswire/ -- Weakening job markets and lower
 consumer confidence likely contributed to a two-point decline in the National
 Association of Home Builders' Housing Market Index (HMI), released today. The
 HMI, which was revised downward one point to 58 in March, fell to 56 in April,
 the lowest reading since January.
     "With long-term mortgage rates hovering around 7 percent, the financing
 climate for home purchases remains very good," said Bruce Smith, a home
 builder from Walnut Creek, Calif., and NAHB president. "However, recent signs
 of continued weakening in the broader economy -- including higher unemployment
 figures and the University of Michigan's report showing lower consumer
 sentiment for early April -- have likely played a role in builders lowering
 their assessments of current home sales and expected sales in the next six
 months."
     The HMI is derived from a monthly survey of builders that NAHB has been
 conducting for nearly 20 years. Home builders are asked to rate current sales
 of single-family homes and sales expectations for the next six months as
 "good," "fair," or "poor." They are also asked to rate traffic of prospective
 buyers as either "high to very high," "average" or "low to very low." Scores
 for responses to each component are used to calculate a seasonally adjusted
 overall index, where any number over 50 indicates that more builders view
 sales conditions as good than poor.
     Two out of three of the HMI's component indexes declined in April. The
 index for current single-family home sales and the index gauging expected
 sales in the next six months each dropped four points, to 62 and 63,
 respectively. Meanwhile, the index gauging traffic of prospective buyers rose
 three points to 41 in April.
     "While significant strength remains in the overall housing market," said
 Smith, "builders are perceiving a bit more hesitancy among potential buyers.
 People are out there looking, but some are less likely to commit in the face
 of current economic conditions."
     About NAHB: The National Association of Home Builders is a Washington-
 based trade association representing more than 203,000 member firms and
 professionals involved in home building, remodeling, multifamily construction,
 property management, subcontracting, design, housing finance, building product
 manufacturing and other aspects of residential and light commercial
 construction. Known as "the voice of the housing industry," NAHB is affiliated
 with more than 800 state and local home builders associations around the
 country. NAHB's builder members will construct about 80 percent of the more
 than 1.5 million new housing units projected for 2001. During a typical year,
 residential construction accounts for about five cents of every dollar spent
 in the U.S. economy, making home building one of the largest and most
 influential industries in the country.
 
                     Housing Market Index (Historical data)
                             (Seasonally Adjusted)
 
                   Jan   Feb  Mar   Apr  May Jun  Jul Aug  Sep Oct  Nov  Dec
     1985           49    57   55    48   51  54   58  59   56  59   58   57
     1986           57    54   57    62   64  66   60  57   57  65   59   63
     1987           63    60   60    59   56  56   55  54   53  50   55   51
     1988           52    51   51    53   55  49   54  56   53  48   56   60
     1989           53    54   48    42   44  46   46  50   51  48   44   44
     1990           41    44   39    37   35  36   33  31   32  30   27   27
     1991           21    26   35    40   39  42   41  36   38  38   37   37
     1992           43    49   46    46   47  46   47  49   49  50   52   55
     1993           53    51   54    52   52  53   58  61   63  67   68   70
     1994           66    64   62    62   60  57   55  54   51  50   48   43
     1995           38    41   39    38   42  45   51  53   53  57   50   52
     1996           51    50   60    60   63  61   60  57   56  55   51   53
     1997           52    54   58    56   55  57   56  58   59  58   56   59
     1998           59    68   67    67   68  71   72  71   71  73   78   78
     1999           76    73   70    70   76  77   74  72   73  70   73   72
     2000           71    69   61    62   62  57   58  61   61  63   65   58
     2001           55    57   58    56
 
 SOURCE  National Association of Home Builders