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Tuesday, September 19, 2006

 

Builder Confidence Lowest Since Feb. 1991


The latest National Association of Home Builders/Wells Fargo Housing Market Index says builder confidence is at its lowest level in 15 years.

NAHB Chief Economist David Seiders offered the following analysis in a press release:
“Builders are adopting an increasingly cautious attitude in their near-term outlook for new-home sales,” said NAHB Chief Economist David Seiders. “They’re experiencing falling sales, rising sales cancellations, and increasing inventories of unsold units. And although many builders are offering substantial incentives to bolster sales and limit cancellations, many potential buyers now are waiting on the sidelines to see how the market shakes out before proceeding with a home purchase.

“We are in the midst of an anticipated adjustment period as the housing market subsides from the record-breaking and unsustainable highs of the past few years,” Seiders noted. “Our forecast projects the numbers flattening out around the middle of next year and gradually moving back up towards trend in 2008.

“That said, long-term housing fundamentals will be very favorable,” he added. “In fact, the housing market that emerges from this correction will have better balance between supply and demand and will be able to ride on excellent underlying fundamentals for years to come.”
The HMI follows an adjustment issued earlier this month by the National Association of Realtors, which said home sales will fall about 8 percent in 2006.

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