Homebuilder Sentiment Falls in August to 16-Year Low
U.S. homebuilder sentiment slid in August to its lowest level since January 1991 as tighter lending standards weighed on builder confidence, the National Association of Home Builders said on Wednesday.
The NAHB/Wells Fargo Housing Market index fell to 22 from 24 in July, the group said in a statement. Economists polled by Reuters had thought the figure would slip to 23. Readings below 50 indicates more builders view market conditions as poor than favorable.
"Builders realize that issues related to mortgage credit cost and availability have become more acute, filtering some prospective buyers out of the market and prompting others to delay their decision to purchase a new home," NAHB President Brian Catalde, a home builder in El Segundo, California, said in the statement.
"Builders are responding by trimming prices and stepping up non-price incentives to bolster sales and limit cancellations, although we're dealing in a difficult market environment," he
Problems in the subprime mortgage sector have spilled over to other components of housing finance, including the Alt-A and jumbo markets, delaying a rebound in the single-family housing
market, NAHB Chief Economist David Seiders said in the statement.