Wednesday, November 16, 2005

Builders Slowing Down

The National Association of Home Builders announced today in a press release that builder confidence has declined for November. However, NAHB President Dave Wilson cautions against reading too much into that and "keep today's report in perspective."

They call this spin.

Sometimes it's right. Sometimes it's wrong.

Here's an exceprt from the NAHB press release:
Responding to sharply lower measures of consumer confidence as well as rising mortgage rates and other factors in recent months, single-family home builders are adjusting their market expectations downward to a still favorable perspective, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for November, released today.

The index declined eight points to rest at 60, a level well above the midpoint that indicates the majority of builders still see conditions as positive in their markets.

“It’s important to keep today’s report in perspective,” said NAHB President Dave Wilson, a custom home builder from Ketchum, Idaho. “Many builders still have substantial backlogs of unfilled orders and will remain quite busy in coming months. But we’re well aware that some slowing of demand is inevitable following the record-breaking sales activity that has prevailed for some time.”

“No huge drop is in the cards – the sharp decline in the HMI probably overstates the actual degree of deterioration in the single-family market, and it’s most likely that we’re engaged in an orderly cooling process that will lead to somewhat lower home sales and production in the future,” added NAHB Chief Economist David Seiders. “We’re looking for a 5 or 6 percent decline in home sales next year, compared to 2005.”

— The Boy in the Big Housing Bubble