On February 15th, the National Association of Home Builders (NAHB) issued a new report on home builder confidence, and their results showed an increase of confidence for single family homes rising for the fifth straight month. However, this report on rising confidence goes in direct opposition to a charting of Mortgage Broker applications, which is showing a decline of nearly 50 points since December of last year.
Home builder confidence in the market for new single-family homes increased for the fifth consecutive month in February, rising from 25 to 29 on the NAHB/Wells Fargo Housing Market Index (HMI) released today. It is the highest level the index has reached in more than four years.
“Builder confidence has doubled since September as measured by the HMI,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “Given the recent improvements in new home starts and the increasing number of markets included in the NAHB/First American Improving Markets Index, this consistency suggests that the housing market is moving toward more sustainable growth.” – NAHB.org
Interestingly, these numbers by the NAHB are in sharp contrast to a report by the National Association of Realtors (NAR) in December which showed that home sales numbers had been inflated by as much as 15%, with 2011 being the worst reporting period in 13 years.
Additionally, while the NAHB report alludes to rising home builds across the board, the number of mortgage applications are declining from a peak in early December. The chart shown in the slideshow to the left of this article reveals that since that time, mortgage applications have fallen from a high of 207 on the index, to a fresh low of 166.
From these two opposing indicators it is difficult to determine which organization is correct in measuring recovery in the housing markets. The NAR report from December is more in line with the drop in mortgage applications over the past two and half months, while the NAHB's announcement of confidence rising for a fifth straight month brings into question the data and intangibles that drew them to this conclusion.
Contrary to most economic reports that come from the government, or other financially based organizations, the recent agreement on foreclosures by the Attorney Generals in most states will negate most conclusions, and assure a continuing recession in housing, and an increase in the amount of foreclosures, inventories, and people who will be leaving their homes, rather than buying new ones.
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