WHOOPS: Homebuilder Sentiment Index Unexpectedly Slips To 28

housing houses san jose suburbs

Photo: Sean O’Flaherty aka Seano1 atwal singh, Wikimedia Commons


It’s a miss.

Analysts had expected the homebuilder sentiment index to rise to 30 from 29 last month.

Instead, we got 28 vs. a downwardly revised 28 last month.

Not a disastrous number, but a disappointment looking for more evidence of a recovery really taking hold in this area.

It’s worth noting that the homebuilder index is unmoved on the data.

ORIGINAL POST: There’s just one datapoint on the scheduled today, and that’s the National Association of Homebuilder sentiment index.

It’s not the most anticipated datapoint there is, but we’re interested in it, as homebuilder sentiment has been growing nicely, and the improvement in the homebuilding industry is one force that’s counteracting some of the headwinds out there (gas, Europe, etc.).

Analysts expect a reading of 30, up from 29 last month. The number comes out at 10:00 AM.

Furthermore, this will be a big week for housing data.

Tomorrow we get housing starts and building permits. Wednesday we get existing home sales. Thursday brings the house price index, and Friday we get New Home Sales.

So by the end of the week, we’ll have a much clearer sense of the housing picture.

UPDATE: Just an interesting note. In the latest Barron’s, Robert Shiller talks up the importance of this index in predicting the housing market.

While he’s reluctant to predict definitively when the U.S. housing bust will end, he points to one leading confidence indicator that appears to be signaling a market turn—the National Association of Home Builders/Wells Fargo Housing Market Index.

This monthly survey seeks to capture shifts in builders’ perceptions of current and future market conditions and buyer traffic. The index has been on a tear of late, rising five months in a row and to its highest level since 2007. Home-builder stocks likewise have blasted off since the October 2011 stock-market low, with Beazer Homes (ticker: BZH) up some 167%, Toll Brothers (TOL), 81%, and the SPDR S&P Homebuilders exchange-traded fund (XHB) up 74%.

This confidence index, Shiller notes, topped out almost seven years ago, in the very month that he boldly predicted in a Barron’s article that the U.S. home market was on the verge of a monumental collapse that would see prices fall an inflation-adjusted 50% (“The Bubble’s New Home,” June 20, 2005).

“It’s amazing how on target that prediction was, since nationally the market is already down 40% in real terms,” Shiller said in a recent telephone interview.

Anyway, we’ll have the number at 10:00 AM.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In

housing moneygame-us