Economic Anxiety Undermining Home-Builder Confidence

Economic Anxiety Undermining Home-Builder Confidence With interest rates still historically low despite an upward trend, consumers are showing elevated levels of interest in purchasing new homes.
But many are holding back, nervous about the economy’s direction as lawmakers in Washington, D.C. put off critical debt and budgetary decisions.
Confidence among builders of newly built, single-family homes was unchanged in November, from a downwardly revised level of 54 on the National Association of Home Builders/Wells Fargo Housing Market Index issued Monday.
This means that for the sixth consecutive month, more builders have viewed market conditions as good rather than poor. The middle of the index, which divides poor and good readings on the market is 50.
“Given the current interest rate and pricing environment, consumers continue to show interest in purchasing new homes, but are holding back because Congress keeps pushing critical decisions on budget, tax and government spending issues down the road,” said NAHB Chairman Rick Judson. “Meanwhile, builders continue to face challenges related to rising construction costs and low appraisals.”
The index component that gauges current sales conditions in November held steady at 58. The component measuring expectations for future sales fell one point to 60.
The only component below 50 is the one that measures traffic of prospective buyers, which dropped one point to 42.
“Policy and economic uncertainty is undermining consumer confidence,” said NAHB Chief Economist David Crowe. “The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.”

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