Belief in the market for single-family homes among those who build them hit a record low this month, the National Association of Home Builders reported.
A bad job market,
still-rising foreclosures and overall negative economic indicators made the
Home Builders/Wells Fargo Housing Market Index stay at November's
all-time low of 9. Two out of the three indexes used to make up the overall
number dropped lower.
"The crisis continues," said NAHB Chairwoman
Sandy Dunn, a home builder from Point Pleasant, W. Va. "While builders are doing
everything we can in the way of price and non-price incentives to move new homes
off the books, buyers are afraid to move forward, and in any case there is
almost no way to compete with the cut-rate product that is continually flooding
the market from mounting foreclosures. Congress and the administration must step
in with substantial incentives to bring qualified buyers back to the table as
well as effective foreclosure relief programs if we are to end this negative
spiral that is weighing so heavily on our national economy."
And things are not expected to improve anytime soon, said NAHB chief economist David Crowe.
"We have seen no improvement over the past
month in terms of sales conditions for new homes," Crowe said. "In fact, certain
factors have gotten progressively worse, not the least of which is the job
market, where massive layoffs are having a devastating effect on consumer
confidence. At this point it will take definitive government action to stop the
slide in home values and turn the tide of consumer sentiment. Expanding the
first-time buyer tax credit and providing government action to reduce mortgage
rates would go a long way toward arresting this downward spiral, just as a
combination of similar moves worked in the 1970s to boost the housing market and
The full report is available at www.nahb.org/hmi.
Confidence remains low, NAHB says
December 18, 2008