Home Builders Confidence Touches Record Low; Calls for Congressional Action Mount
Home builders continued to call for Congressional action to bolster the faltering U.S. housing market Monday afternoon, as builder confidence in the market for newly-built single-family homes during June matched a record low seen last December. According to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), the index slipped to 18 in June; that's off from 19 one month earlier. The HMI series began in January of 1985, and a reading over 50 indicates perceived strength in the newly-built housing market; obviously, we're a ways off from that watermark currently. The renewed lows in builder confidence spurred renewed calls for housing legislation from NAHB officials, including CEO Jerry Howard, who argued that "targeted housing stimulus legislation" was needed to keep builders afloat. "Each week that goes by, another 15,000 workers are losing their jobs and 47,000 families are entering foreclosure. Home equity has fallen by $879 billion during the past year alone," said Howard, in remarks at a press conference. "How many more Americans have to suffer before Congress will act?" NAHB economist David Seiders said that "downside risks" were considerable for home builders right now, and that Congressional action could help mitigate some of those risks. "Clearly, conditions in the housing market remain very weak, and our builder members are not seeing any signs of improvement," he said. "A targeted stimulus such as a temporary home-buyer tax credit would help turn this situation around and restore housing as an engine of economic growth." It might be a bit Pollyanna-ish for anyone to expect that any single legislative act -- for example, the temporary home-buyer tax credit -- would be enough to "restore housing." After all, we heard similar rhetoric in the days leading up to the passing of the Economic Stimulus Bill of 2008, in which housing pundits including the NAHB argued that boosting the conforming lending limit in certain high cost areas would most certainly "unleash pent up housing demand." Since that time, the nation's housing mess has proved to be a bit more multi-faceted than that, and the NAHB has since moved on to call for further legislative boosts. "Today's numbers are a reflection of how much our members are hurting as this downturn in housing markets continues," said NAHB President Sandy Dunn, a home builder from Point Pleasant, W.Va. "Many are small-business owners who are the backbone of their local economies, and in some cases they are having to lay off family members and friends just to stay afloat. "Congress can't act too quickly to help reverse this trend." For more information, visit http://www.nahb.com.