Skip to main content
Advertising

Originally published May 15, 2014 at 7:23 AM | Page modified May 15, 2014 at 10:21 AM

  • Share:
           
  • Comments (0)
  • Print

US homebuilder confidence slips in May

U.S. homebuilders are feeling less confident this month in their near-term sales prospects, reflecting doubts stirred by a sluggish start to the annual spring home-selling season.


AP Real Estate Writer

advertising

U.S. homebuilders are feeling less confident this month in their near-term sales prospects, reflecting doubts stirred by a sluggish start to the annual spring home-selling season.

Even so, builders are more optimistic that sales will perk up later this year. That would bode well for home construction, which slowed early this year as severe winter weather dampened sales in many markets.

The National Association of Home Builders/Wells Fargo builder sentiment index released Thursday fell to 45. That's down one point from a revised reading of 46 in April and the lowest level in 12 months.

Readings below 50 indicate that more builders view sales conditions as poor rather than good. The overall index has been below 50 since February.

"Builders are waiting for consumers to feel more secure about their financial situation," said David Crowe, the NAHB's chief economist. "Once job growth becomes more consistent, consumers will return to the market in larger numbers and that will boost builder confidence."

Many analysts have been expecting an improving economy and job market to lift the housing market, which has been recovering the past two years. But housing has struggled to maintain momentum.

The spring home-selling season, which typically sets the pattern for residential hiring and building construction in the ensuing months, got off to a lackluster start this year.

U.S. sales of new homes are running 13 percent below last year's pace. They slowed in March to a seasonally adjusted annual rate of 384,000, down from 443,000 a year earlier. The March figure represents the lowest rate since last July, when sales cratered after mortgage interest rates spiked.

Sales of previously occupied U.S. homes also fell in March, sliding to a seasonally adjusted annual rate of 4.59 million, the lowest level since July 2012.

Several of the nation's biggest homebuilders have said that sales were held back in the first three months of the year by the severe winter weather that battered much of the U.S. Rising prices and higher mortgage interest rates also have deterred some homebuyers, particularly first-time buyers. Others have had trouble qualifying for mortgages.

Still, many builders also saw demand accelerating last month, stoking expectations that sales will rebound this summer.

That optimism is reflected in the latest NAHB index, which is based on responses from 278 builders.

While builders' view of current sales conditions for single-family homes fell two points to 48, the lowest level in 12 months, a measure of traffic by prospective buyers increased two points to 33. And builders' outlook for sales of single-family homes over the next six months rose one point to 57.

Some builders are already seeing sales perk up this year.

Sales at The Olson Co., which builds homes in Southern California priced at an average of $500,000, are up 60 percent in the first quarter from a year ago, said CEO Scott Laurie.

A tight supply of available homes for sale in the counties of Los Angeles and Orange has helped stoke demand. That has Olson in expansion mode. The builder is now planning to double the company's number of open communities to eight.

"Last year was a good year, but this year has been even stronger," Laurie said. "The demand is there."



Want unlimited access to seattletimes.com? Subscribe now!

News where, when and how you want it

Email Icon

Seattle Restaurant Week

Seattle Restaurant Week

Only 2 days left to enjoy 3-course dinners for $30 at over 160 local restaurants. Make your reservations now!

Advertising

Advertising

The Seattle Times Historical Archives

Browse our newspaper page archives from 1900-1984


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►