Homebuilder Sentiment Stays Low as Market Struggles
Homebuilder confidence was unchanged at low levels in November, but sales of newly built, single-family homes were expected to rise slightly in the next six months, according to a study by the National Association of Home Builders.
The NAHB/Wells Fargo Housing Market Index held steady at 17, while the sales prediction gauge rose to 28, up two points from October. A reading of 50 signals that more builders view sales conditions as good than poor.
Most of the survey's responses were received before Congress voted to extend the $8,000 first-time homebuyer tax credit, which may drive sales higher than the study anticipated, the association said.
"Now that Congress has done its job by both extending the tax credit into next year and expanding eligibility for it among potential buyers, we are very hopeful that this will have the intended stimulative effect on sales activity going forward," said NAHB Chairman Joe Robson.
Still, the challenges facing the housing market's recovery are burdensome. Builders are having trouble obtaining credit to produce more houses, and appraisal values continue to deteriorate, said NAHB Chief Economist David Crowe. One-third of those surveyed said they have recently lost sales because of low appraisal values, up from 25 percent in July.
"These issues still present a very worrisome problem that is weighing down prospoects for a sustained housing market recovery," he said.
November's number's were unchanged from October's downwardly revised level of 17.
On a regional basis, the South was flat at 17, the Midwest fell three points to 14, the Northeast dropped six points to 19 and the West rebounded from a big dip in October to post 19 points.
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