Builder confidence continues to improve in August
Builder confidence in the market for newly built, single-family homes rose two points for August on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This is the fourth consecutive month of improvement, and brings the HMI to its highest point — 37 — since February 2007.
"From the builder’s perspective, current sales conditions, sales prospects for the next six months and traffic of prospective buyers are all better than they have been in more than five years," said Barry Rutenberg, NAHB chairman and a home builder from Gainesville, Fla. "While there is still much room for improvement, we have come a long way from the depths of the recession, and the outlook appears to be brightening."
"This fourth consecutive increase in builder confidence provides further evidence of the gradual strengthening that’s occurring in many housing markets and provides a needed boost to local economies," said NAHB chief economist David Crowe. "However, we are still at a very fragile stage of this process, and builders continue to express frustration regarding the inventory of distressed properties, inaccurate appraisal values, and the difficulty of accessing credit for both building and buying homes."
Derived from a monthly survey that NAHB has been conducting for the past 25 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number more than 50 indicates that more builders view sales conditions as good than poor.
Every HMI component posted gains in August. The components gauging current sales conditions and traffic of prospective buyers each rose three points, to 39 and 31, respectively, while the component gauging sales expectations in the next six months inched up one point to 44. All were at their highest levels in more than five years.
Regionally, builder confidence rose nine points to 42 in the Midwest and two points to 35 in the South, but declined nine points to 25 in the Northeast and three points to 40 in the West in August.
Valspar posts third-quarter gains
Minneapolis-based Valspar Corp., makers of paint, reported third-quarter sales of $1.08 billion, up 1% from the same quarter last year.
“We were pleased with our performance in the quarter,” said Gary Hendrickson, chairman and CEO. “Excluding negative currency impact, our revenue increased 3% and our strong earnings growth is the outcome of excellent execution in a challenging global environment.”
Net income for the third quarter of 2012 was $86.4 million, up 28.1% from $67.4 million in the third quarter of 2011.
“Looking ahead to our fourth quarter, we expect continued softness in some international markets and modest growth in North America,” Hendrickson said.
Provider networks, premiums drive health plan choices
When given a choice, most Americans with traditional health coverage say they chose that option because it offered a good network of providers, according to research findings by the not-for-profit Employee Benefit Research Institute (EBRI).
In contrast, among those with high-deductible consumer-driven health plans, most cited the lower premiums and opportunity to save money in a health savings account (HSA) or health reimbursement arrangement (HRA).
While close to half of all private-sector workers who have health insurance are offered a choice of health plans, most of those with a choice work for large firms, according to the report, Health Plan Choice: Findings from the 2011 EBRI/MGA Consumer Engagement in Health Care Survey, published in the July 2012 issue of EBRI Notes.
“Most Americans get their health insurance coverage from employment-based plans, yet most employers do not offer a choice of health plans,” said Paul Fronstin, director of EBRI’s Health Research and Education Program and author of the report. “Health plan choices are likely to expand via the expansion of insurance exchanges under the Patient Protection and Affordable Care Act, so it’s important to know how people make their decisions when they do have a choice.”
Among the report’s key findings:
• Half of consumer-driven health plan enrollees reported that they chose that offering because of the lower premium, while 45% reported that the opportunity to save money in the account for future years was a primary reason.
• Among individuals with traditional health coverage, 39% cited the good network of providers and 32% reported the low out-of-pocket costs as the main reasons for enrolling in the plan.
There was no difference in satisfaction with ease of getting an appointment with a doctor or choice of doctors between those enrolled in a consumer-directed health plan and traditional plan enrollees. However, enrollees in a high-deductible health plan without a spending account were less likely than traditional plan enrollees to be extremely or very satisfied in these areas.
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