The National Association of Homebuilders (NAHB) has issued a report indicating the market for new, single-family homes have declined to its lowest point since April 2009. The report, drawing on data from the Wells Fargo Housing Marketing Index, indicates the index rell two points lower than analysts anticipated.
"We continue to see a lull in home buying activity following the expiration of the federal home buyer tax credit program, as many of the sales that would have occurred this summer were likely pulled forward to meet that program's deadline," said NAHB Chairman Bob Jones, who was quoted in the report. "In addition, builders are reporting continuing consumer hesitancy regarding home purchases due to uncertainty in the overall economy and job markets."
"This month's lower HMI reflects a number of underlying market conditions that builders are seeing, including hesitant home buyers, tight consumer credit, and continuing competition from foreclosed and distressed properties that are priced below the cost of construction," said NAHB Chief Economist David Crowe, also quoted in the report. "The pause in sales following expiration of the home buyer tax credits is turning out to be longer than anticipated due to the sluggish pace of improvement in the rest of the economy. That said, we do believe that favorable factors such as low mortgage rates, affordable prices, and demographic trends will help revive consumer demand for new homes this year, and that new-home sales will improve by 10 percent in 2010 from 2009."
The report documents a decline in a number of nationwide homebuilding indexes in July, ranging from one to two percentage points.
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