Home builder outlook weak, experts say

August 03, 2010 06:30PM

A quarterly report from home builder D.R. Horton reflects an undue level of market enthusiasm, due to the tax credit’s artificial boost, according to the Wall Street Journal. Donald Tomnitz, CEO of D.R. Horton, said that his company scrambled to build for any buyer that “had a pulse and… were warm,” during the tax credit boom, resulting in a 60 percent uptick in quarterly closings. Unfortunately, as with other home builders, some of those buyers later backed out or didn’t qualify for mortgages. And the future doesn’t look too bright, either, according to real estate analyst Mike Larson, who noted that the post-tax credit drop-off in activity has been significant. “If you’re looking for a pulse in the U.S. housing market, best of luck,” said Larson, an analyst with Weiss Research. “I can’t seem to find one.” Data on homebuyers, released by the National Association of Realtors, also paints a bleak picture, with the number of people signing contracts dipping 2.6 percent between June and May. [WSJ]