US Home Builders' Sentiment Falls In September
Last update: 9/19/2011 10:00:00 AM
By Alan Zibel and Jeff Bater
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--The mood of U.S. home builders soured this month, as the industry coped with a stagnating economy and pessimism among consumers.
The National Association of Home Builders said Monday its housing market index fell to 14 in September, down from 15 a month earlier. The results were worse than expected. Economists polled by Dow Jones Newswires had forecast a reading of 15.
All three components of the index decreased. Readings for traffic from potential buyers and expectations for single-family sales in the next six months both fell by two points. A gauge of current sales conditions fell by one point.
Builders are pessimistic because many consumers "are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," said David Crowe, the NAHB's top economist. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market."
The numbers used in compiling the index are adjusted for seasonal variations. A reading of 50 in the NAHB index would mean more builders view conditions as good rather than poor. The last time the home builders' confidence gauge was in positive territory was April 2006.
Weakness in the economy, combined with still-falling home prices and tight credit, are making many consumers shy away from the housing market. Meanwhile, many consumers have been opting for deeply discounted foreclosures.
The trade group's chairman, Bob Nielsen, a home builder from Reno, Nev., also noted that "both builder and consumer confidence took a hit in recent weeks" after the Standard & Poor's downgrade of the nation's credit rating and the contentious debate in Congress about whether to lift the federal debt ceiling.
The September index was based on a survey of 478 builders. It fell in three out of four U.S. regions, sinking in the Northeast, South and West but increasing in the Midwest.
-By Alan Zibel, Dow Jones Newswires; 202-862-9263; alan.zibel@dowjones.com
(END) Dow Jones Newswires
September 19, 2011 10:00 ET (14:00 GMT)
