Builder confidence declines in June

The National Association of Home Builders/Wells Fargo Housing Market Index reports builder confidence in the market for newly built, single-family homes declined three points in June. The index had been holding at a low but steady level for the past 6 months. The last time the index was this low was in September 2010.
“Builders are being squeezed by the continuing weakness in existing-home prices against which they must compete, as well as rising material costs,” said NAHB chairman Bob Nielsen, a home builder from Reno, Nev. “In addition to the ongoing impacts of distressed property sales on home prices, appraisal values and consumer confidence, rising costs for materials such as roofing, copper, wallboard, vinyl siding and other components have made it extremely difficult to construct a new home and sell it at a price that covers the costs.”
NAHB chief economist David Crowe said as economic growth has stalled, builder confidence continues to decline even further. He said at the same time foreclosures continue to occur and home building costs continue to rise.
“Meanwhile, potential new-home buyers are being constrained by difficulty selling their existing homes, stringent lending requirements, and general uncertainty about the economy. “said Crowe. “Economic growth must pick up in order for housing to gain the momentum it needs to get back on track."