Builder confidence in the market for newly built single-family homes held at a record low in December as deepening economic turmoil, a deteriorating job market, and an ongoing flow of foreclosed homes onto the market continued to negatively impact sales conditions.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) did not budge in December from November’s all-time low reading of 9, with two out of three component indexes losing further ground.
“The crisis continues,” said NAHB Chairman Sandy Dunn, a home builder. “While builders are doing everything we can in the way of price and non-price incentives to move new homes off the books, buyers are afraid to move forward, and in any case there is almost no way to compete with the cut-rate product that is continually flooding the market from mounting foreclosures.”
“We have seen no improvement over the past month in terms of sales conditions for new homes,” NAHB Chief Economist David Crowe said. “In fact, certain factors have gotten progressively worse, not the least of which is the job market, where massive layoffs are having a devastating effect on consumer confidence. At this point it will take definitive government action to stop the slide in home values and turn the tide of consumer sentiment.”