Housing Market Index Rises One Point in July

WASHINGTON, July 16-Indicating that builders generally see positive
conditions in the market for new single-family homes, the National Association of Home Builders' Housing Market Index (HMI) rose one point to 61 in July from the previous month. The HMI has held within two points of a favorable 60 reading since the beginning of this year.

"Low interest rates and the solid investment potential of homeownership are
proving to be powerful incentives for new-home buyers, and builders are seeing solid demand for homes in most markets," said Gary Garczynski, NAHB president and a builder/developer from Woodbridge, Va. "Emphasizing the market's stability, the component of the HMI that measures builder confidence in current sales hasn't budged from a very good 65 reading for
the last five months."

Garczynski added, however, that builders across much of the country continue
to be concerned about shortages of lots available for development - particularly in the Northeast, South and West. "Housing affordability suffers when demand exceeds the number of homes that can be built," he
explained.

The HMI is derived from a monthly survey of builders that NAHB has been
conducting for nearly 20 years. Home builders 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 as either "high to very high," "average," or "low to very low."  Scores for responses to each component are used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

At 61, July's HMI was up a single point from June. The component index
gauging current sales was unchanged at 65, where it has been since March of
this year, while the index gauging sales expectations for the next six months rose one point, to 69.  Registering the most movement this month, the index gauging traffic of prospective buyers rose four points to 48.

"The single-family housing market should continue providing good support to
the economy this year, particularly when the impacts of home price appreciation on household wealth and consumer spending are considered," said NAHB Chief Economist David Seiders. He noted that NAHB forecasts indicate new-home sales for 2002 should reach 934,000 units, up nearly 3 percent from last year's record pace.

EDITOR'S NOTE: Housing is vital to local and state economies, creating jobs
and generating taxes and wages that positively influence the quality of life. Find out more about this crucial component of the economy at
http://www.nahb.com/news/housingjobs.htm. Also, NAHB's publication, Housing: The Key to Economic Recovery, explains just how housing has led the economy to recovery. This publication is available free of charge on NAHB's website, at www.NAHB.com/housing_issues.

ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 205,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.