Homebuilders remain pessimistic about sales opportunities
Homebuilder confidence remains abysmally low as builders face stiff competition from distressed properties, according to the latest National Association of Home Builders/Wells Fargo housing market index. Slowing on the new home sales front also is attributed to tighter underwriting guidelines and difficulties in moving existing real estate. The index, which measures builder confidence, considers any index score over 50 favorable, but in the newly built, single-family home construction segment, the index score remains 15, suggesting anemic sales and worries over long-term stressors in the market. Bob Nielsen, chairman of the NAHB, said 41% of respondents indicated they lost contracts because of a buyer's inability to sell an existing property. The current sales index and the index measuring traffic of prospective buyers remained well below 50, as well, with index scores of 16 and 13, respectively. In the Northeast, homebuilder confidence rose slightly, hitting 19 on the index scale, while the West and South held at 15 and 17, respectively. The index declined two points to 10 in the Midwest. Write to: Kerri Panchuk.