Headline Alert
Housing Update: Homebuilder Sentiment Drops
The NAHB (National Association of Home Builders) Housing Market Index for December came in with a reading of 16, which was below the consensus for a reading of 18 and the November reading 17.
The survey of homebuilders said the weak result can be blamed on the weak labor market as the 26-year high in unemployment is keeping people from thinking about building a new home.
"This is shaping up to be a bumpy recovery period for the housing market," said NAHB chief economist David Crowe. "Tight lending conditions for both consumers and home builders continue to pose considerable obstacles on the road to a sustained housing and economic recovery."
"From an affordability standpoint, rarely has there been a better time in history to purchase a home, thanks to record low interest rates, attractive prices, and of course the recent extension and expansion of the home buyer tax credit," said Joe Robson, chairman of the NAHB.
Readings above 50 in the survey suggest that builders view sales conditions as positive while a reading below 50 are indicative of poor conditions.
Elsewhere in the survey, the Sales Expectations over the next six months component dropped 2 points to a reading of 26. Finally, the Traffic of Prospective Buyers index was unchanged at 13 for the third month in a row.
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