WASHINGTON -- Snapping a string of two consecutive monthly gains, builder confidence in the market for newly built, single-family homes fell back to February levels, before the beginning of the home buyer tax credit-related surge, according to results of the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
The HMI dropped five points to 17 in June.
"The home buyer tax credit did its job in stoking spring sales and we expected a temporary pull back in the builders' outlook after the credit expired at the end of April," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, MI. "However, the reduction in consumer activity may have been more dramatic than some builders had anticipated, which resulted in their lower confidence levels."
"We expected some softening in the market following the expiration of the home buyer tax credit and this report seems to verify this assumption," said NAHB Chief Economist David Crowe. "In the coming months, an improving economy, rising employment, low mortgage rates and stabilizing home values should help the housing market move forward. But as today's HMI data shows, builders still remain very cautious and are aware that several factors could impede the nascent housing recovery, including serious problems in obtaining financing for the production of housing, faulty appraisal practices and competition from short sales and foreclosed properties."
Read the National Association of Home Builders' press release.
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