Home builders' confidence plunges to 15-year low

Home builders' confidence plunges to 15-year low

WASHINGTON (MarketWatch) -- The confidence of U.S. home builders collapsed in August, falling to the lowest level since February 1991, the National Association of Home Builders said Tuesday.

The NAHB/Wells Fargo housing market index dropped by seven points to 32 in August, indicating that most builders think the housing market is poor.

A year ago, the index was at 67. A reading of 50 would indicate builder sentiment was balanced between good and poor.

The index peaked at 72 in June 2005 and has fallen in 12 months since then. It's the fastest decline in the 21-year history of the index, which has had a fairly good record of predicting the number of new homes started.

Builders in all four regions of the country are pessimistic about the market.

"Two factors are coloring builders' perceptions of the market right now - rising sales cancellations and substantial growth in inventories of both new and existing homes," said David Seiders, chief economist for the home builders' industry group. "These factors are largely the result of an increasing number of potential buyers adopting a 'wait and see' attitude because of uncertainty about where the housing market is headed.

Speculators are fleeing the market, he said.

High energy costs are also weighing on buyers' minds, Seiders said.

In August, all three components of the home-builders' index fell. Current sales index fell to 36 from 43, the expected sales index dropped to 40 from 46. and the traffic of potential buyers' index fell to 21 from 27.

The Commerce Department will report on housing starts for July at 8:30 a.m. Eastern time Wednesday. Economists are looking for a 2% decline to 1.82 million, according to a survey conducted by MarketWatch. See Economic Calendar.

Housing starts have fallen about 18% since the peak at the beginning of the year. New-home sales are down about 17% from the peak last July.

As housing slows, employment in construction, real estate, banking and related retail sectors has also weakened. Economists are divided over the potential impact on consumers from the deceleration in the increases in wealth that have helped to support consumer spending.

Consumers have been spending more than their disposable incomes for the past year, in part by taking out equity from their homes.

klarer fall von soft landing.....

gruß
jan-martin