Florida Mortgage Worries Continue to Hit Home Builders, Lower Confidence Levels
Problems in the Florida mortgage market continued to take their toll on home builders’ confidence about the housing market in April.
The monthly National Association of Home Builders/Wells Fargo Housing Market Index declined 3 points to 33 in April, its lowest level since December.
A number over 50 indicates that more home builders view sales conditions as good than as poor. Home builder stocks were mixed after the report was released Monday afternoon.
“Tightening of mortgage lending standards in connection with the [bad credit mortgage] crisis has shaken the confidence of both consumers and builders, as reflected in this report,” said NAHB Chief Economist David Seiders in a statement.
“Indeed, the unfolding effects of this crisis have compelled NAHB to trim our forecasts of home sales and housing production for both 2007 and 2008,” he said.
“While [home builders] still expect to see some improvements in housing market activity beginning later this year, the downside risks and uncertainties surrounding that forecast are considerable.”
The index gauging current single-family home sales fell three points to 33, while the index gauging sales expectations for the next six months declined six points to 44.
The index gauging traffic of prospective home buyers declined a single point to 27, reflecting declining Florida mortgage loan activity and increased problems within the lending industry.
There were confidence declines from all four of the nation’s regions in April, with the Midwest index registering the biggest decline - five points - to 22.
The Northeast showed a one-point decline to 38, the South posted a three-point decline to 37, and the West saw a two-point decline to 35.
“The subprime shakeout clearly is a serious matter for the single-family home market,” said NAHB President Brian Catalde, a home builder from El Segundo, Calif., in a statement.
“Builders in the field are reporting adverse effects on both sales and cancellations at this time, and it remains to be seen how serious these effects will be as we move through the spring home buying season.”
SOURCE: TheStreet.com
