Builder Confidence Continues To Erode

Washington, DC, June 16, 2008 - Builder confidence in the market for newly built single-family homes edged down in June, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI). The index slipped to 18 this month, returning to the record low that was posted in December of 2007 (the series began in January of 1985).

Economists had expected the index would notch up one point.

“Each week that goes by, another 15,000 workers are losing their jobs and 47,000 families are entering foreclosure. Home equity has fallen by $879 billion during the past year alone,” said CEO Jerry Howard. “How many more Americans have to suffer before Congress will act?

“Clearly, conditions in the housing market remain very weak, and our builder members are not seeing any signs of improvement,” noted NAHB Chief Economist David Seiders.

“Indeed, the continuing erosion of employment and consumer confidence/sentiment, coupled with surging energy costs, falling house prices and rising home mortgage foreclosures, pose considerable downside risks to the economy and our housing forecast. A targeted stimulus such as a temporary home-buyer tax credit would help turn this situation around and restore housing as an engine of economic growth.”

The HMI’s component indexes gauging current sales conditions and sales expectations for the next six months each remained unchanged in June, at 17 and 28, respectively. Meanwhile, the component gauging traffic of prospective buyers fell a single point to 17.

Regionally, HMI results were mixed this month, although all regions are down dramatically from their respective peaks in 2005.