Builder Confidence Hits New Low; NAHB Urges Buyer Stimulus
Home builder confidence across the U.S. slumped to a new record low of 8, according to a monthly survey released Wednesday by the National Association of Home Builders. The housing market index, measuring builder perceptions of current single-family home sales and sales expectations for the next six months, is based on a scale of 100 where any number over 50 indicates more home builders perceive sales conditions as good than poor. An all-time low of 8 -- a downward slip of a single point from December's survey -- indicates sales conditions are worse than they have been in more than 20 years, since the NAHB began the survey. “Clearly, conditions in the nation’s housing market aren’t getting any better, and they aren’t going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market,” said NAHB chairman Sandy Dunn, a W. Va.-based home builder. “The Obama Administration and the new Congress have a tremendous opportunity and responsibility to enact legislation that can spur home buyer demand and jump-start the national economy.” NAHB said in a press release regarding the survey that it is advocating a home buyer tax credit incentive and a government buy-down of mortgage rates for home purchases in 2009. It said it hopes such moves "would rejuvenate demand for homes and trigger significant consumer spending across the board." In the first hours of President Barack Obama's administration, he is already faced with an influx of proposed housing bills. H.R. 600, a bill sponsored by Al Green, D-Texas that aims to “revise the requirements for seller-financed downpayments for mortgages for single-family housing insured by the secretary of Housing and Urban Development,” was referred on Jan. 16 to the House Committee on Financial Services. The bill boasts two long-time compatriots in the case for seller-funded DPA, Maxine Waters, D-Calif. and Gary Miller, R-Calif., as co-sponsors. Miller is making headlines elsewhere with two other bills he has sponsored and were referred Friday to the House Committee on Financial Services. H.R. 607, which aims “to direct the Securities and Exchange Commission to issue guidance on the interpretation of fair value accounting,” and H.R. 587, which aims “to increase the loan limits for the FHA single-family housing mortgage insurance programs…and for the conforming loan limits for Fannie Mae (FNM) and Freddie Mac (FRE) during 2009,” are both awaiting further review by the committee. Write to Diana Golobay at email@example.com. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.