Research >> Economics
Builder Confidence Slips in October
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With the expiration date for an important home buyer incentive approaching, builder confidence in the market for newly built, single-family homes slipped one point to 18 in October, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
It comes as no surprise that after trending upward from an historic low in January, the HMI’s positive momentum now appears to have stalled. Our economists have repeatedly warned that the approaching expiration of the $8,000 home buyer tax credit on Nov. 30, combined with the massive hurdles that builders face in obtaining construction financing and appropriate appraisals on new homes, could derail the fragile recovery in housing just as it is starting to take shape.
This is the first time since November of 2008 that all three component indexes of the HMI have declined. Clearly, builders are experiencing the effects of the expiring tax credit on their sales activity, since it would be virtually impossible at this point to complete a new home sale in time to take advantage of that buyer incentive before Nov. 30.
Posted: October 19, 2009 Monday 01:00 PM