Home Builder Confidence Declines in June

Washington, DC, June 15, 2010--Builder confidence in the market for newly built, single-family homes fell back to February levels, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index.

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, Mich.

“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.”

Each of the HMI’s component indexes recorded declines in June.