Home Builder Confidence Drops Further

Home builder sentiment remains at low levels in June, falling 3 points to a reading of 13 on the NAHB/Wells Fargo Housing Market Index, the National Association of Home Builders reported on Wednesday. The last time the index was this low was in September of 2010.

"Builders are being squeezed by the continuing weakness in existing-home prices – against which they must compete -- as well as rising material costs," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

NAHB Chief Economist David Crowe echos Nielsen’s statement. "Meanwhile, potential new-home buyers are being constrained by difficulty selling their existing homes, stringent lending requirements, and general uncertainty about the economy,” Crowe added. “Economic growth must pick up in order for housing to gain the momentum it needs to get back on track."

Regionally, home builder confidence only picked up in the Northeast, edging up two points to 17. The index fell the most in the West, down by four points to 12. The Midwest experience a three point decline to 11, and the South fell two points to 14.

NAHB has been keeping track of this data every month since 1985. A score of 50 or more indicates that more builders view home sales conditions as good than poor. Since July 2007, the index has remained at depressed levels in the mid-20s and lower, hitting an all-time low of 8 in January 2009. Before the housing bubble busted, monthly HMI scores were regularly in the 60s and 70s.


Source:
National Association of Home Builders