Belief in the economy among builders of single-family homes declined during April, according to a new poll from the National Association of Home Builders.
The NAHB-Wells Fargo Housing Market Index dropped one point
to 16, where it has sat for five of the last six months. A number above 50
signifies that most builders consider the market to be in good shape.
"While builders in some
areas are starting to see a pickup in traffic of prospective home buyers, many
consumers remain skittish about the health of the housing market and overall economy,
particularly in view of recent legislative and regulatory proposals that could
make it much harder to get a mortgage," said Reno, Nev., builder Bob
Neilsen is the association’s
"At the same time, builders are competing
against a large number of foreclosed and distressed properties on the market,
which are holding down prices and appraisals and making it tough for potential
clients to sell their existing homes," he said.
NAHB chief economist David
Crowe echoed Nielsen’s comments.
"The spring home buying
season is getting off to a slow start due to persistent concerns about home
values as more foreclosures seem to be hitting the market, increasingly
restrictive lending requirements for home buyers and builders, and the slow
pace of economic recovery," he said. "While pockets of improving
activity are appearing in some markets, the best sales activity appears to be
happening in the lower price ranges, where first-time buyers have greater
flexibility than repeat buyers who must sell their current home. Consumers who
can take advantage of today's low mortgage rates and very attractive pricing
are finding bargains and are buying."
Survey: Builder confidence drops
April 19, 2011