Builder Confidence Sags; NAHB Says Congress "Must Move Immediately"
Prospects for home builders dimmed in the back half of April and into early May amid market conditions that continue to erode, the National Association of Homebuilders said Thursday. The NAHB/Wells Fargo Housing Market Index fell slightly to a reading of 19, off just one point from the record low set in December 2007. NAHB president Sandy Dunn, herself a home builder, said that a continued slide in the housing market must be stopped, ostensibly for the sake of the association's constituency. "With the HMI hovering in the historically low two-point range that's prevailed over the past nine months, the message is very clear: The single-family housing market is still deteriorating and Congress and the Administration must move immediately to enact legislation that will help reverse the trend," she said. The NAHB is traditionally among the largest sources of PAC donations on Capitol Hill each year, and recently decided to return to lobbying and, of course, donating to key Senators again after earlier withdrawing its participation in protest of what NAHB leaders characterized at the time as a "lack of action" from Congress. House Financial Services Committee Chairman Barney Frank (D-MA) pushed legislation through last week that contained key provisions builders have in the past lobbied in favor of, and -- whether through coincidence or not -- the NAHB PAC said it had resumed its participation a week ago, after naming Frank its "person of the year." Both the House and Senate have approved bills creating a temporary home buyer tax credit of up to $7,500 for qualified buyers, but the legislation has yet be crafted into a comprehensive bill that can be sent to President Bush for his signature; the proposed legislation also would extend the so-called "net operating loss carry-back rule" to four years from two years. The carry-back rule allows U.S. companies to use losses from one year to offset income from the previous two years. Critics say the proposed tax change is a hand-out to builders. "The housing market has shown no evidence of improvement thus far," said NAHB Chief Economist David Seiders. "In fact, conditions have continued to deteriorate in recent times." Scores over 50 on the Wells Fargo/NAHB index indicate that more builders view sales conditions as good than poor. For more information, visit http://www.nahb.org.