new home sales
Homebuilder sentiment index hits new record low
January 22, 2009 by Mortgage Align · Leave a Comment
Homebuilder’s confidence was reduce to a new low for January with unemployment and the ongoing recession as primary factors for the new home construction problem. The National Association of Home Builders / Wells Fargo housing market index dropped from holding at 9 for the previous two months to a record low of 8 in January. From DallasNews.com:
Index readings higher than 50 indicate positive sentiment about the market. But the index has drifted below 50 since May 2006 and has been below 20 since April. The slide in builders’ confidence accelerated in the wake of the U.S. financial crisis, slipping three points in October and then five points in November.
“Clearly, conditions in the nation’s housing market aren’t getting any better,” NAHB Chairman Sandy Dunn said in a statement, “and they aren’t going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market.”
Homebuilders are pushing Congress for a 10 percent tax credit of up to $22,000 for homebuyers that purchase a home over the next year. They are also asking for a temporary interest-rate reduction on 30-year mortgages.
On Tuesday, a panel of housing experts projected that builders’ woes will deepen this year, pushing the prospect of a recovery into 2010 at the earliest.
“We do expect ‘09 to be the down year, to be the bottom,” David Crowe, chief economist for the National Association of Home Builders, said during a news conference at the International Builders’ Show, which runs through Friday.
