Faith in the market for new, single-family homes
declined to its lowest level since February, according to aNational Association of Home Builders survey.
Faith in the market for new,
single-family homes declined to its lowest level since February, according to
results of a National
Association of Home Builders survey.
The NAHB/Wells Fargo Housing Market
Index for June dropped five points to 17.
"The home buyer tax
credit did its job in stoking spring sales and we expected a temporary pull
back in the builders' outlook after the credit expired at the end of
April," said NAHB chairman Bob Jones, a home builder from Bloomfield
Hills, Mich. "However, the reduction in consumer activity may have been
more dramatic than some builders had anticipated, which resulted in their lower
confidence levels."
The 20-year-old NAHB index gauges
builder perceptions of the market for the next six months, asking builders to
rate expectations as “good,” “fair” or “poor.” It also surveys homebuilders about
customer traffic rates. A number above 50 indicates positive feelings about the
U.S. housing market.
Despite the index’s drop,
there are still some reasons for optimism, said association chief economist
David Crowe.
"We expected some
softening in the market following the expiration of the home buyer tax credit
and this report seems to verify this assumption," Crowe said. "In the
coming months, an improving economy, rising employment, low mortgage rates and
stabilizing home values should help the housing market move forward. But as
today's HMI data shows, builders still remain very cautious and are aware that
several factors could impede the nascent housing recovery, including serious
problems in obtaining financing for the production of housing, faulty appraisal
practices and competition from short sales and foreclosed properties."
