Some Relief In Homebuilder Data (XHB)

The National Association of Home Builders monthly index for this month took a huge leap from 9 to 14 to get the index out of single digit territory and at a 6-month high.  The bad news is that the reading for “equilibrium” between growth and contraction is 50.  So this is far from good news.  There are still many issues and many issues have created this “bounce” data.  The SPDR S&P Homebuilders (NYSE: XHB) ETF is up 5% at $12.15 today, but be advised that this has actually come off of highs from right before the NAHB data was released.

Here is the breakdown:
current sales conditions rose to 13, from 8 in March;
prospective buyer traffic rose to 14, from 9 in March;
and future sales expectations (6-months out) rose to 25, from 15 in March.

What is intersting here is that the traffic seems to be based upon lower and lower housing prices.  Many builders are selling at cost or even under, and there is still a monster wave of foreclosure properties out there.  Just this morning we saw another survey that noted how foreclosures are back on the mend.

This is based upon 360 homebuilder surveys.  What we have found in our own checks is that homes that fit deep into the conventional mortgage levels are now moving because the price has become very affordable with very low rates.  If it is a jumbo loan and there are any mortgage tricks or any credit issues, let’s just say that segment of housing is playing the “NOT INCLUDED” game.  That $8,000 tax help has so far not added in as much as we would have hoped, or at least that is what we are being told from realtors.

Jon C. Ogg