A few months ago we said the nation's home builders were cautiously optimistic about the housing recovery.
Today I'm thinking they are a lot more cautious than optimistic.
That's because of the tenuous state of government stimulus in housing.
Several powerful programs are set to expire at the end of this year. Some will likely be extended, others, perhaps not.
Number one is the first time home buyer tax credit, set to expire Nov. 30th. No question, sales of new construction have been juiced by the $8000 bonus, and without it, we could see a reverse in overall sales. This month's home builder confidence survey from the National Association of Home Builders showed a drop in the index measuring sales expectations over the next six months.
There is a bill on Capitol Hill, introduced several months ago, that would extend the credit, expand it to $15,000 and make it for all home buyers, not just first timers. But while it was easy enough to get the credit lumped into the economic stimulus package, it may not be so easy to do it as a stand-alone bill. While some insiders tell me a small housing package is in the works, others give it a much smaller chance given how much pressure Congress and the Federal Reserve are under right now over the budget deficit.