Builders’ confidence in new home market unchanged

Builders’ confidence in the market for newly built, single-family homes remained unchanged for a fourth consecutive month in February, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
“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 NAHB chairman Bob Nielsen.
Nielsen said “an extremely tight lending environment continues to make it almost impossible to obtain credit for viable new and existing projects.” He said most builders don’t see the lending situation improving anytime soon.
“Builders are telling us that some pockets of optimism have begun to emerge, but many prospective purchasers are concerned about selling their existing home in the current market, or face difficulty securing credit for a home purchase -- even when they are well-qualified,” said NAHB chief economist David Crowe. “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.”
On a positive note, two out of three of the HMI’s component indexes edged up slightly in February. The component gauging current sales conditions improved by two points and the component gauging sales expectations in the next 6 months rose a single point. The component gauging traffic of prospective buyers remained the same.