Home Builder Sentiment Falls Again

Washington, DC, May 16, 2008–Homebuilder confidence fell unexpectedly this month among, signaling the housing slump won’t turn around soon.

The National Association of Home Builders/Wells Fargo index of builder sentiment fell to 19 from 20 last month. The index reached a record low of 18 in December. Readings under 50 mean conditions are considered poor.

All three index components dropped. The reading on current sales of single-family homes hit a record low and builders may have to continue lowering prices.

Economists had forecast the index would be unchanged at 20 for a fourth month.

The index averaged 27 last year.

“Our measure at this level, this historically low level, does imply further deterioration of home sales and housing production,” David Seiders, chief economist at the builders’ group, said in a Bloomberg Television interview.

The measure of current single-family home sales fell to a record-low 17. Forecasts for sales six months from now dropped to 27 from 30.