Builders News

Home-building index declines

U.S. home builders reported declining sales conditions in March for the first time in six months, reflecting worry about worsening credit in subprime mortgage markets, according to an industry survey released Monday. The National Association of Home Builders' index of sales activity for new, single-family housing fell to 36 this month from a downwardly revised 39 last month, initially reported as 40. When the NAHB's housing market index is under 50, the number of builders who see "poor" sales outnumber the number who see "good" sales. With housing markets cooling over the past year, the index has stayed under this threshold for 11 straight months after holding above it the previous 10 years

Home builders less confident in March

U.S. home builders lost confidence this month amid concern that tighter credit standards would discourage would-be buyers.

The National Association of Home Builders/Wells Fargo index of sentiment fell to 36 this month from February's revised 39, a seven-month high, the Washington-based association said. A reading below 50 means most respondents view conditions as poor.

Home builders, struggling to recover after more than a year of slumping sales, now face the possibility that a surge in defaults on subprime mortgages will make other types of home loans harder to get. That may provide a greater drag on construction as builders hold off starting work on more houses until completed ones are sold.

"Builders are a little shaky about whether they really think demand is going to improve going forward," Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report.

"We still expect housing to turn the corner in 2007. But it's going to be a big drag on the economy for most of the year," she said.