Builder confidence shows no improvement

Builder confidence in the market for newly built, single-family homes remained unchanged at a rate of 16 for a fourth consecutive month in February, according to the National Association of Homebuilders/Wells Fargo Housing Market Index, released today. The index gauges builder perceptions of current single-family home sales and sales expectations for the next six months, and anything below 50 means builders consider conditions poor. “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,” said Bob Nielsen, chairman of the NAHB. He also noted that “an extremely tight lending environment” is making it almost impossible to obtain credit for new and existing projects, a situation that is not expected to improve in the near future. According to David Crowe, NAHB’s chief economist, builders are saying many prospective buyers are concerned about selling their existing home in the current market, or face difficulty securing credit for a home purchase. “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,” Crowe said. TRD