Builder confidence holds steady
The NAHB-Wells Fargo Housing Market Index for the month stood at 16 - the fourth straight month the index was unchanged.
It’s a sign that many builders believe the U.S. housing market has a long way to go until a real recovery is under way, said David Crowe, the association’s chief economist.
"Builders are telling us that some pockets of optimism have begun to emerge, but many prospective purchasers are concerned about selling their existing home in the current market, or face difficulty securing credit for a home purchase - even when they are well-qualified," Crowe said. "Adding these concerns to the severe difficulty that builders continue to confront in obtaining acquisition, development and construction financing, you can understand why builder sentiment has not improved over the past four months."
The index is created from a monthly survey the NAHB has done among members for 20 years. A number above 50 indicates most builders view market conditions as positive.
Many builders continue to struggle, said association Chairman Bob Nielsen, a builder from Reno, Nev.
"While builders are starting to see more interest among potential home buyers, we are also dealing with a multitude of challenges, including competition from foreclosure properties and inaccurate appraisals of new homes, which are limiting our ability to sell," Nielsen said. "On top of that, an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects, and most do not see that situation improving anytime soon."