Michigan Housing Index Makes Encouraging Second Quarter Gains

(Lansing, MI) – A statewide survey of homebuilders covering the second quarter of 2011, showed sharp increases for new building and remodeling over the same period one year ago.  The Michigan Housing Index (MHI) for new homebuilding activity has remained fairly steady in recent months, averaging a score of 36 for the quarter ending June 30, 2011.  Though overall activity remains slow in the current economy, the MHI second quarter index is sharply ahead of the same period last year, when the index only registered a 26.

“We have to be encouraged by the year-to-year increases in outlook and business activity for both builders and remodelers,” said Robert Filka, CEO of the Michigan Association of Home Builders.  “There are pockets of increased activity around the state, but we still have a long ways to go.  Greater credit availability and continued improvement in what has been a dysfunctional appraisal marketplace is needed to sustain more growth.”

The Michigan Housing Index (MHI) is a quarterly summary of building and remodeling activity compiled by MAHB.  The survey asks builders about the number of homes currently under construction and in the planning stages.  Builders are also asked to evaluate their prospects for future customers.  Totals are calculated in an index that is reported quarterly to provide a tracking mechanism for the industry’s process.

Following is a year-to-year comparison of the MHI Index:

                                    April-June 2011                     April-June 2010         % Change

Builders Index                                    36                                            26                        38%

Remodelers Index                   58                                            46                        26%

“Having the state budget and tax reform package in place has eased some of the economic uncertainty in Michigan, which has certainly been helpful,” said Filka.  “But Michigan still needs the legislature to abolish the punitive tax on inventory homes, which now, more than ever, discourages builders from building and constrains job creation and growth in our sector.”

Among the highlights in the 2^nd Quarter MHI index:

• The MHI remodelers index has increased six of the past seven months;
• Consumers continue to emphasize smaller, more affordable energy efficient homes; and
• There appears to be an increase in current and projected homebuilding activity in the $200,000-$500,000 price range.

About the MAHB Michigan Housing Index:

The Michigan Housing Index combines results of a monthly survey of Michigan builders and remodelers along with a series of economic statistics including single family home permits, crude oil prices, automobile production and unemployment. The MAHB Michigan Housing Index is intended to provide an accurate projection of the future direction of the building and remodeling housing market in Michigan.