Home Builder Confidence Sinks to 17-Month Low: NAHB

Housing constructionConfidence among builders of single-family homes slid for a third straight month in August on concerns of persistent unemployment, a slower recovery and the prevalence of foreclosure sales, according to a key market index.
The latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) declined one point to 13, its lowest level since March of 2009.
A majority of builders cited the foreclosure crisis and its widespread availability of heavily discounted homes as a major blow to the home building market.
“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,” said NAHB Chief Economist David Crowe. “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.”
The index is derived from a monthly survey of builders by the NAHB. It gauges builder perceptions of the current housing market and sales expectations for the next six months.  Seasonally adjusted, the index at 50 points indicates that more builders view conditions as good rather than poor.
Three out of four regions posted HMI declines in August. A six-point drop to 18 in the Northeast partially offset a big gain in that region in the previous month. The South and West each posted one-point declines to 13 and 8, respectively. The HMI for the Midwest held even at 15.
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