Home builders continue to be depressed about their prospects for new construction despite a decline in mortgage rates over the past few weeks.
According to the National Association of Home Builders/Wells Fargo Housing Market Index, builder confidence for single-family homes remained unchanged at an ultra low reading of 16 in May. (Any reading over 50 indicates that more builders view sales conditions as good than poor.)
The NAHB/Wells index has been mired around this level for six out of the past seven months.
“Builder confidence has hardly budged over the past six months as persistent concerns regarding competition from distressed property sales, lack of production credit, inaccurate appraisals, and proposals to reduce government support of housing have continued to cloud the outlook,” said NAHB chairman Robert Nielsen, a home builder from the Reno, Nev., market.
And now builders have another worry: high gasoline prices. Builders that were surveyed cited high gas prices as a “further contributor to consumer anxiety and reluctance to go forward with a home purchase.”
NAHB has been surveying its builder/members for 20 years, gauging their views on the business.
Meanwhile, in a new report from the National Association of Business Economics, the group says its panelists have trimmed their forecast on housing starts to 610,000 units from 660,000 back in February.
The group sees home prices sliding by about 1.2% this year before increasing by 2% next year.
