Homebuilder Sentiment Falls to 15-Year Low

Washington, DC, April 15, 2008--Homebuilder confidence fell to a 15-year low in March, the National Association of Home Builders said on Tuesday.

The NAHB/Wells Fargo Housing Market index dropped three points to 30 in March, matching the 15-year low set in September 2006. A tight credit market and order cancellations fueled the fall.

Readings below 50 mean more builders view market conditions as poor rather than favorable.

"The crisis in the subprime sector has infected other parts of the mortgage market as well as consumer psychology, and as a result the housing outlook has deteriorated," NAHB Chief Economist David Seiders said in a press release.

NAHB predicts that home sales and building will not start improving until late this year, and that early stages of a rebound will be "quite sluggish," the group said.

"Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead," NAHB President Brian Catalde said in the statement.

All three of the NAHB's component indexes fell in May, as they have the prior two months.

The gauge of current single-family home sales dropped two points to 31. The index of sales expected in the next six months dropped three points to 41, and the prospective buyer traffic index slid four points to 23 in May.