NEW YORK - Builders’ confidence in the market for new single-family homes continued its slide, falling to its lowest level since March 2009, as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment – dropped to 13 in August from an unrevised 14 in July.
Thomson Reuters' poll of economists predicted a level of 15.
“Builders are expressing the same concerns that they are hearing from consumers right now, particularly the sense that the overall economy and job market aren’t gaining any traction,” said NAHB Chairman Bob Jones. “Meanwhile, many continue to report that problems with inaccurate appraisals, competition from the large number of distressed properties on the market, and tight consumer lending conditions are causing them to lose potential sales.”
“Today’s report reflects single-family home builders’ concerns about current and future economic conditions and about the increasing hesitancy they are seeing among potential home buyers,” NAHB Chief Economist David Crowe said. “It also reflects the frustration that builders are feeling regarding the effects that foreclosed property sales are having on the new-homes market, with 87 percent of respondents reporting that their market has been negatively impacted by foreclosures.”
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
Two of the three component indexes fell in August. The current single-family home sales index slipped to 14 from 15, and the sales expectations index for the next six months dropped to 18 from 21. The traffic of prospective buyers index held at 10.
