The National Association of Home Builders (NAHB) have released the Housing Market Index (HMI) numbers for August 2010, which currently stands at 13, the lowest level on the books since March 2009.  The number is a composite drawn from a monthly survey of home builder perceptions that the NAHB has been conducting for more than 20 years.

The NAHB speculates that the decline in the HMI can be attributed to a variety of factors including a continued lack of confidence on the part of consumers that the economy will rebound in the short-term, as well as the impact that foreclosed property sales are having on the new-homes market.  This seems to jive with information from RealtyTrac released this month, claiming that foreclosure filings increased nearly 4 percent from the previous month (although they decreased nearly 10% over-year).

Our own conversations with BuildZoom members seems to support the idea that homeowners are currently more interested in pursuing foreclosures, which they believe to be far better financial investments, than they are in purchasing or building new homes.

Taking a step back however, the August decline seems to be a temporary bump in the road of what looks like a more long-term rebound.

Overall, 2010 has seen a significant increase in the HMI over the previous year and this trend is expected to continue through the second half of 2010 as low mortgage rates and increasing demand should facilitate more activity in the new homes market.

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