Homebuilder Sentiment Hammered

Washington, DC, July 17, 2007--A key housing market index fell in July, reflecting the two-year downtrend in the housing industry.

The National Association of Homebuilders/Wells Fargo market index dropped from 28 to 24 in July, one of its lowest readings ever.

"The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003-2005 period," said David Seiders, chief economist for the builders' trade group, in a press release.

 

"Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers."

All of the components dropped to their lowest readings since 1991. A reading of 24 means that about a fourth of all builders view conditions as poor.