A key gauge of homebuilders' confidence remained near historic lows in March, as builders saw a drop in prospective homebuyers visiting model homes amid rising job losses and economic fears, according to a survey released Monday.
A key gauge of homebuilders' confidence remained near historic lows in March, as builders saw a drop in prospective homebuyers visiting model homes amid rising job losses and economic fears, according to a survey released Monday.
The National Association of Home Builders/Wells Fargo housing market index stood at nine, one point off the all-time low hit in January.
The report reflects a survey of 384 residential U.S. developers, tracking builders' perceptions of market conditions. Index readings lower than 50 indicate negative sentiment about the market. The index has been below 10 since November, reflecting the toughest market conditions in a generation.
Scores of employers have announced broad layoffs in recent months giving many would-be homebuyers pause. Builders say strict mortgage requirements are also stymieing some potential sales.
"The economy continues to be the main drag on home sales activity right now, in terms of consumer confidence across most of the country," said David Crowe, chief economist for the Washington-based trade association.
Regionally, builder confidence rose by one point in the Northeast to nine. The index remained unchanged from last month in the Midwest, South and West.
Builders surveyed said current markets conditions didn't change from February's index at seven. Their expectations for sales over the next six months remained at 15.
But builders' assessment of buyer traffic dropped two points to nine. That decline reverses an uptick in February, when builders reported that prospective buyers were responding to lower mortgage rates and aggressive incentives.
The industry hoped to get a lift from an $8,000 tax credit for first-time homebuyers included in the economic stimulus package enacted last month, but so far it has failed to stoke significant sales.
Last week, Ara Hovnanian, chief executive of Red Bank, New Jersey-based homebuilder Hovnanian Enterprises Inc., said the stimulus plan was essentially a "nonevent from housing's perspective."
