Builder confidence in the market for newly built, single-family homes retreated two points to 15 in March as poor weather conditions and distressed property sales posed increasing challenges to builders and buyers, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.
“Unusually poor weather conditions certainly had a negative effect on builders’ business in February,” said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, MI. “At the same time, the continual flow of distressed properties priced below the cost of production is having an adverse effect on new-home appraisals and also making it tough for builders’ customers to sell their existing homes.”
“The lack of available credit for new projects, the large number of distressed properties for sale and the continuing hesitancy of potential buyers due to the weak job market are definitely weighing on builder confidence at this time,” said NAHB Chief Economist David Crowe. “That said, the inventory of new homes on the market is at an extremely low level, and we do expect a 25 percent improvement in new-home construction in 2010 over 2009 to rebuild inventory and meet expected pent-up demand.”
In declining two points to 15 this March, the HMI returned to where it was in January 2010, losing the ground it had gained in the intervening month
to Daily News