Homebuilder Confidence Slips To 9-Month Low

Mortgage and Lending with DNJ Gateway Mortgage


Homebuilder confidence slips in June 2011

Despite rising new home sales and an increase in building permits nationwide, home builder confidence slipped to a 9-month low in June. The monthly Housing Market Index from the National Association of Homebuilders registered 13 this month — three ticks lower than last month, and its lowest level since September 2010.

June’s 3-point drop from May is the biggest one-month move since May 2010, the month after the expiration of the federal home buyer tax credit. The retreat could signal favorable pricing for new home buyers in Raleigh in the months ahead.

When builders get less bullish on housing, they may be more willing to negotiate for upgrades and discounts. Ultimately, this can help new home buyers buy homes at better, lower prices.

A closer look at the Housing Market Index shows why this may be true.

The Housing Market Index is not a single-reading statistic. It’s a composite; the result of 3 separate surveys, each meant to measure a specific facet of a home builder’s business. The survey questions are:


  1. How are market conditions for the sale of new homes today?
  2. How are market conditions for the sale of new homes in 6 months?
  3. How is prospective buyer foot traffic?

When builders reply, their responses are tallied and mapped to a scale of 1-100. Readings over 50 are considered favorable. Readings under 50 are considered unfavorable. The HMI has not been higher than 50 in more than 5 years.

In June, the HMI composite reading of 13 was anchored by falling foot traffic and reduced expectations for “future sales”. Homebuilders expect new home sales to be down through the New Year.

Therefore, if you’re a home buyer in North Carolina and have considered “buying new”, the time may be right for making an offer. Financing is cheap, home values are low, and builders are pessimistic — a terrific combination for today’s home buyer.

Posted by

Interested in me?  I am a mortgage loan officer at DNJ Mortgage with headquarters in Raleigh, NC.  Not only have myself and my team helped thousands of homeowners finance homes in our local area including Apex, Cary , Wake Forest , Chapel Hill, Durham, and many more areas in North Carolina; but we originate loans in all states from Virginia to Florida.  We have command over all loan programs from FHA, USDA, VA, to NC Housing, down payment assistance, conventional loans, etc...  We also specialize in low closing cost loans and no closing cost loans. 

Click here to apply!


Austin Herbert, CRMS
Senior Loan Officer
DNJ Gateway Mortgage
919.459.6505 o
919.523.2505 c
888.718.5742 f
1350 Sunday Drive ste. 109 Raleigh, NC 27607

DNJ Mortgage

Facebook Page  Twitter

Comments (2)

Michael Dagner
Brokers Guild Classic - Denver, CO
Your Denver Homes Realty Expert

Hi Austin,

This is the wrong time of the year for homebuilders to have such a low confidence level.  Buyers should smell some real deals and opportunity for new homes right now, including dirt starts.  Where did you find your chart, if I may ask?  Didn't notice at NAHB.  Thanks! 

Jun 23, 2011 05:51 PM
Austin Herbert
DNJ Gateway Mortgage - Raleigh, NC

You're right Michael, there are some great opportunities out there, but the numbers don't lie. Here's a link to another report that also provides some more detailed graphs http://www.forextv.com/forex-news-story/forex-nahb-builder-confidence-index-declines-in-june

Thanks for the comment.

Jun 24, 2011 09:52 AM