Home Builders Survey Sends Gloomy Message Once Again
The Housing Market Index (HMI) of the National Association of Home Builders held steady at 16 in August, matching the record low set in July. On a regional basis, the HMI fell in the West (11 vs. 14 in July), was unchanged in the South, and rose slightly in the Midwest (14 vs. 10 in July) and Northeast (16 vs. 14 in July).
The Current Sales Index moved up to 16 from a record low reading of 15 in July. The six months ahead sales index rose slightly to 25 from 23 in July. New home builders’ assessment of prospective buyers remained unchanged at the record low of 12.
The HMI advanced eight months has the strongest correlation (64%) with sales of single-family homes (see chart 2). Based on this relationship, sales of new homes are likely to remain in a slump for several months ahead, with a recovery likely only in the latter half of 2009.
