A survey of homebuilders’ assessment of the housing market shows the industry’s sentiment fell in November to yet another low.
By David Goldman, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) — Homebuilders’ confidence in the housing market again plunged to a record low, dragged down by poor financial market conditions, rising unemployment and consumer anxiety, a trade group said Tuesday.
The National Association of Home Builders (NAHB)/Wells Fargo housing market index for November fell to a seasonally adjusted reading of 9, the lowest recorded level since the index began in 1985. Economists surveyed by Thomson/IFR expected the index to remain at 14, the previous record low set in October.
A reading below 50 indicates that builders who think home-sales conditions are poor outnumber those who think the environment is positive for sales. November’s reading was the sixth record low set or matched in the past seven months.
“Today’s report shows that we are in a crisis situation,” said Sandy Dunn, NAHB chairman, in a statement. “Tremendous economic uncertainties have driven consumers from the housing market, and it’s going to take some major incentives to bring them back.”
Builders were asked for their view of the current market, the number of buyers looking at homes and expectations for six months from now.
Of the more than 400 homebuilders surveyed, nearly all – 98% – of the builders surveyed believe consumer concern about the economy was a key problem currently facing the housing market. Other issues receiving almost unanimous agreement were buyers’ inability to sell their existing homes, continued dour news about the market and tight mortgage lending conditions.more