Survey: Builder confidence drops
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.
Neilsen is the association’s chairman.
"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."