Slow sales still dampening confidence in housing

By Martha C. White

The National Association of Home Builders/Wells Fargo Housing Market Index for September dropped one point from August, new data released Monday show, reflecting builders' low confidence both in the market today and in the prospect of improvement in six months.

September's number was 14,?one point down from the measure of 15 in both July and August. The figures for single-family sales both now and in six months all fell, as did the measure of prospective buyer traffic. (Builder sentiment is measured on a 100-point scale, with figures below 50 indicating a negative view of the market and above 50 indicating optimism.)

Even though mortgage rates are hovering near record lows, sales of single-family homes remain moribund.

"Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time," NAHB Chairman Bob Nielsen said in a statement. The downgrading of U.S. debt by Standard & Poor's, a volatile stock market and political wrangling over the nation's debt ceiling also dragged on the housing market, he adds.

The index has hovered between 13 and 17 for the past 12 months. September's figure is one point higher than it was one year ago. This month, nearly all regions of the country fared worse. The exception was the Midwest, where builder confidence rose a single point from 10 to 11. Confidence dropped by two points in the Northeast and South, and by three points in the West.

The large number of distressed properties and the slow speed at which they are being reabsorbed into the market both lower current and future confidence. This process has actually slowed since last year, according to The Wall Street Journal, as allegations of fraud and robo-signing has?kept banks from selling foreclosed homes and making buyers leery of purchasing them. Until the legal logjam is broken, builders are unlikely to see many encouraging signs for housing.

Source: http://bottomline.msnbc.msn.com/_news/2011/09/19/7838775-slow-sales-continue-to-dampen-confidence-in-housing-market

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