WASHINGTON -- Builder confidence declined for a seventh consecutive month in September, according to the latest National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), released Sept. 18. The HMI dropped two points to 20, tying its record low reached in January of 1991. Reasons for the decline include concerns about the substantial inventory of new homes for sale and the effects that deepening mortgage market problems are having on buyer demand, according to the NAHB, a Washington-based trade association.
“Builders are expressing concern that home buyers are getting spooked by the many headlines they are seeing on mortgage market issues and their continuing effects on the housing market and home prices,” said NAHB President Brian Catalde, a homebuilder from El Segundo, CA.
“Certainly problems across the mortgage finance arena are taking their toll on buyer demand, which is weighing heavily on builder confidence measures,” said NAHB Chief Economist David Seiders. “Even so, availability of mortgages under the government-supported part of the market remains very good, and the long-term fundamentals of housing are solid in terms of projected household formations, income growth and other factors. We now expect to see home sales return to an upward path by the second quarter of 2008 and we expect housing starts to begin a gradual recovery process by the third quarter of next year. At that point, the market will have substantial growth potential.”
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