Builders' confidence in the market for new single-family homes slipped in December as the National Association of Home Builders' housing market index — a monthly gauge of builder sentiment — fell to 16 from November's 17, the group announced yesterday.
Thomson Reuters' poll of economists predicted a level of 18.
"From an affordability standpoint, rarely has there been a better time in history to purchase a home, thanks to record low interest rates, attractive prices, and of course the recent extension and expansion of the home buyer tax credit," said NAHB chairman Joe Robson.
"However, builders are not seeing the full impact of these conditions on buyer demand, partly because awareness of the latest incentives is still building, and partly because of concerns about job security and other economic woes."
"As we anticipated, this is shaping up to be a bumpy recovery period for the housing market," said NAHB chief economist David Crowe. "While some families may be just starting to factor the expanded tax credit into their potential home-buying plans, many are hesitating because of the poor economy.
"At the same time, tight lending conditions for both consumers and home builders continue to pose considerable obstacles on the road to a sustained housing and economic recovery."
Two of the three component indexes slid in December. The current single-family home sales index dipped to 16 from 17, and the traffic of prospective buyers index remained at 13. The sales expectations index for the next six months fell to 26 from 28.
