Volume 8, Issue 8 - September 2007

Industry Indices

Builder Confidence Falls Further in July
A surplus of unsold homes on the market, combined with ongoing concerns in the sub-prime mortgage arena and affordability issues associated with tightened lending standards and higher interest rates, continues to take a significant toll on builder confidence, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which was recently released. The HMI declined four points to 24 in July, which is its lowest level since January of 1991.

“The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003-2005 period,” says NAHB chief economist David Seiders. “Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers.”

Seiders shares promising news about the future.

“In spite of these challenges, we expect to see home sales get back on an upward path late this year and we expect housing starts to begin a gradual recovery process by early next year. At that point, this market will be operating well below its long-term potential, providing plenty of room to grow in 2008 and beyond.”

The survey also asks builders to rate traffic of prospective buyers as either “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

All three component indexes declined in July. The index gauging current single-family sales and the index gauging sales expectations in the next six months each declined five points to 24 and 34, respectively, while the index gauging traffic of prospective buyers declined three points to 19.

Likewise, all four regions of the country posted declines in the July HMI. The Northeast and South each saw five-point declines, to 31 and 26, respectively, while the Midwest slipped a single point to 19 and the West declined three points to 25. 

HMI tables can be accessed online at: www.nahb.org/hmi.

  May ’07 April ’07 Difference

Finished Products

Plastic windows 
and their frames 
7,415,323  6,701,039  +10.66%
Doors and their 
frames, wood 
61,563,646  62,741,385  -1.88%
Aluminum windows 
and their frames 
31,495,130  24,834,404  +26.82%
Iron windows or 
steel and their 
frames, not stainless  
2,841,163  2,260,522  +25.69%
Wood windows, French windows 
and frames 
16,417,597  15,544,664  +5.62% 


Cast and rolled glass 8,223,144  7,617,324  +7.95%
Float glass  600,101  693,748  -13.5%
safety glass
4,989,443  5,111,661  -2.39%
Insulating glass units  20,369,125  19,153,545  +6.35%
Wood and 
articles of wood
117,767,497  106,075,872  +11.02%

Source: U.S. Commerce Department



   May ’07  April ’07  Difference
Finished Products
Plastic windows, frames and 
thresholds for doors
10,024,261  8,100,287  +23.75%
Wood windows, French windows 
and their frames
6,888,269  5,872,297  +17.3% 
Doors and their frames, wood 11,758,346  10,116,564  +16.23% 
Cast and rolled glass 21,936,087  39,303,604  -44.19%
Float glass  16,029,371  17,742,748  -9.66%
safety glass
7,391,177  6,839,176  +8.07%
Insulating glass units 10,436,373  6,676,465  +56.32%
Articles of glass  12,387,653  13,093,984  -5.39%
Articles of wood  14,532,882  15,298,778  -5.01%
shaped wood
26,781,125  21,395,492  +25.17%

Source: U.S. Commerce Department


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