April NAHB Housing Index At 19, Down 1 From March

Builders’ confidence in the market for new single-family homes dropped again in May, as the National Association of Home Builders’ housing market index - a monthly gauge of builder sentiment – slipped to 19 after spending three months at 20, the group announced this afternoon.

IFR Markets’ poll of economists predicted a level of 21.

“Despite the Federal Reserve’s concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far. In fact, conditions have continued to deteriorate in recent times,” said NAHB Chief Economist David Seiders. “The latest HMI shows that even fewer builders now foresee market conditions improving over the next six months compared with our April survey, and builder ratings of buyer traffic through model homes also have dropped off over the past month on a seasonally adjusted basis. This certainly adds fuel to the argument that targeted policy stimulus, in the form of a temporary tax credit for home buyers, is essential to halt the housing downswing and remove the heavy drag being exerted by housing on overall economic growth.”

The three component indexes declined in May. The current single-family home sales index slipped to 17 from 18, while the sales expectations index for the next six months fell to 27 from 30, and the traffic of prospective buyers index dropped to 17 from 19.

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