Builders' confidence in new-home market still high, survey says

REAL ESTATE WATCH

October 20, 2002

Builder confidence in the market for new single-family homes remained virtually unchanged this month from September's healthy level, according to the National Association of Home Builders' Housing Market Index, released last week. The index declined a single point to 62, its second-highest reading all year.

"On the strength of continuing low mortgage rates and sound house-price performance, builders still have a very good outlook on the current marketplace," said Gary Garczynski, association president and a homebuilder from Woodbridge, Va.

"Buyer demand remains strong at the present time, though builders are moderating their expectations for future sales and noting slower traffic of prospective buyers."

The index is derived from a monthly survey in which homebuilders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair" or "poor." They are also asked to rate traffic of prospective buyers. Scores for responses to each component are used to arrive at a seasonally adjusted index. Any number over 50 indicates that more builders view sales conditions as good than as poor.

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