According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), builder confidence declined three points to 33 in April, its lowest level since December 2006.
“The tightening of mortgage lending standards in connection with the subprime crisis has shaken the confidence of both consumers and builders, as reflected in this report,” said David Seiders, NAHB chief economist. “While we still expect to see some improvements in housing market activity beginning later this year, the downside risks and uncertainties surrounding that forecast are considerable.”
Derived from a monthly survey the NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months.
The survey gauges three component indexes, and they all registered declines in April. The index gauging current single-family home sales fell three points to 33, while the index gauging sales expectations for the next six months declined six points to 44, and the index gauging traffic of prospective buyers declined a single point to 27.
The survey also includes four regions, which all posted HMI declines in April, with the Northeast showing a one-point decline to 38, the Midwest registering a five-point decline to 22, the South posting a three-point decline to 37, and the West posting a two-point decline to 35.
However, NEMA’s Electroindustry Business Confidence Indices’ (EBCI) results showed an improvement in the month of March. The EBCI for current North American conditions climbed to 56.5 for the month, its highest level since April 2006. That represents a significant improvement from February, when the index stood at the “break-even” mark of 50, suggesting conditions were flat relative to the prior month. Moreover, the survey’s measure of the mean degree of change in North American business conditions remained in positive territory for a second straight month, rising to +0.2 from +0.1 a month ago. As recently as December, it had registered as low as –0.6, on a scale from –5 (deteriorated significantly) through 0 (stayed the same) to +5 (improved significantly).
The results of these surveys suggest even as the housing market declines, the electrical industry continues to grow. EC