Home builders less confident in market

Home builders may be losing confidence in the housing market, now that government incentives that promoted home sales have ended.

According to the Associated Press, The National Association of Home Builders reported Tuesday its housing market index fell to 17 in June.  That decrease of five points came after two straight months of increases, and was at its lowest level since March.

Thanks to the homebuyer’s tax credit of $8,000 sales of new homes jumped nearly 15 percent in April.  That followed a nearly 30 percent spike in March, also the biggest monthly increase in nearly 50 years.

However, that tax credit ended on April 30, although buyers with signed contracts have until June 30, to complete their purchases.

“We are a lot less confident,” said Dan Bailey, president of the Snake River Valley Building Contractors Association.  “Lending is the issue. It is extremely difficult to get a loan, no matter what banks are telling us. Homebuyers are ready to build, have a loan, but can’t get construction financing.”

Many experts believe home sales will slow in the second half of this year.  Two factors that may keep buyers away include high unemployment and tight mortgage lending requirements.

“I very optimistic by trade – I’m a home builder, so, I believe that we are at a comeback,” said Hayden Watson, of Hayden Homes.  “If I look at the national and regional trends with 50-year permit lows, so the basic supply and demands demographics tells me that we’re at the bottom or near the bottom.”

Source:  IBR

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