Builder Confidence Dips as Tax Credit Expire

Even though mortgage rates continue to flirt with all-time lows, homebuilding executives feel awful. A new report from the National Association of Home Builders says executives in the sector are losing confidence in housing now that two federal tax credits have expired. NAHB said its housing market index fell to 17 in June, sinking five points after two straight months of increases. It was the lowest reading since March. "The homebuyer tax credit did its job in stoking spring sales and we expected a temporary pullback in the builders' outlook after the credit expired at the end of April," said NAHB chairman Bob Jones, a homebuilder from Bloomfield Hills, Mich. "However, the reduction in consumer activity may have been more dramatic than some builders had anticipated, which resulted in their lower confidence levels." Builders were more optimistic earlier in the year when consumers could take advantage of tax credits of up to $8,000. The incentives expired April 30 but buyers with signed contracts have until June 30 to close. Legislation has been introduced in the Senate to extend the closing deadline into September.