Builders say home market is very slow
Builders aren’t feeling much better about the new-home construction market, according to a survey released Monday by the National Association of Home Builders and Wells Fargo.
“Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements,” said Bob Nielsen, NAHB chairman and a builder from Reno, Nev.
The NAHB-Wells Fargo Housing Market Index gauges builders’ beliefs on the market for single-family homes during the next six months. Builders are asked to rate the market as “good,” “fair” or “poor” as well as prospective buyer traffic from “very high” to very low. A number over 50 means more builders view conditions as good than poor.
August’s index stood at 15, one of the lowest levels of confidence recorded in the 20-year history of the survey, association officials said.
"The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time," said NAHB chief economist David Crowe. "While buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey."