The latest U.S. homebuilder confidence index can be looked at a couple of ways. With the overall reading stuck at 28 for the second straight month, you could say the days still look pretty dark to the nation’s homebuilders, considering that a reading of over 50 is when they think times are good. Or you could look back and say the current measure – low as it is — is the best since June of 2007.
The reading, known as the HMI and released Monday morning by the National Association of Homebuilders and Wells Fargo (NYSE:WFC), measures the sentiment of homebuilders regarding newly built, single-family homes.
In the press release accompanying the announcement, Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla., said “While builders are still very cautious at this time, there is a sense that many local housing markets have started to move in the right direction and that prospects for future sales are improving. This is demonstrated by the fact that the HMI component measuring builder expectations continued climbing for a sixth straight month in March, to its highest level in more than four years.”
The NAHB’s chief economist, David Crowe, added the appropriate perspective: “Many of our members continue to cite obstacles on the road to recovery, including persistently tight builder and buyer credit and the ongoing inventory of distressed properties in some markets.”
In midday trading, shares of the homebuilders who’s confidence this index tracks were mixed. Toll Brothers (NYSE:TOL) was 1% lower along with Ryland (NYSE:RYL), down 0.7% and D.R. Horton (NYSE:DHI) at 0.5% lower.