Home-builders index slumps to 17-month low

[Roland99]

Source: MarketWatch

Home-builder confidence slumped in August to a 17-month low, according to a report released Monday, in another indicator of a tentative housing market.

The National Association of Home Builders/Wells Fargo Housing Market Index fell by one point to 13, its worst reading since March 2009. Economists polled by MarketWatch had anticipated a rise to 15.

To put in perspective, any reading over 50 indicates that more builders view conditions as good than poor. There hasn't been a reading over 50 since April 2006.

...

Two of the three component's indexes, current sales conditions and sales expectations for the next six months, fell in August. The component measuring traffic of prospective buyers held unchanged.

Read more: http://www.marketwatch.com/story/home-builders-index-slumps-to-17-month-low-2010-08-16

[kirby]

1. Good.

There are a plethora of EXISTING homes that need to be sold/bought. These stories amaze me. Our entire country was inflated due to a housing price bubble. However all these news articles compare the current state of things to getting back to the 'good ole times' which was unsustainable. Will we ever learn any lessons?

[leftyladyfrommo]

2. Yea. But refi's are up.

At least around Kansas City. The mortgage companies are really busy. Trouble is that the refi business only lasts so long.

[ixion]

3. With the largest inventory of available housing ever, that only makes sense

Perhaps they should have thought of that when they were building houses at break-neck speed.

[Roland99]

4. There is a problem with a large number of those existing homes, though.

They're part of a "shadow inventory" in the form of REO and Short Sales. Many people don't or won't take the time to go through the long, drawn-out process of buying a foreclosed or short sale home.

That was something I was considering for my family but we found new construction for a payment equal to what rent would have been. Didn't want to move twice in a year. Not worth the hassle.

[ixion]

5. Yeah, I came up against that recently

and opted for another property rather than the short sale one.

Perhaps banks will pull their head out at some point. They're almost impossible to work with anymore.

[Roland99]

6. Multi-pronged errors on the part of the banks.

1) They should have started helping homeowners on their own, resetting loans to match the falling house values, locking in interest rates, etc. Why not lose a bit of future income instead of sitting on thousands of greatly deflated assets?

2) Their lack of hiring on additional people to handle the increased load of foreclosures.

3) With the failure of #1, their stubbornness to hold onto the homes as long as possible in the hopes that prices come back up (HA!) and they won't lose as much money.




Denial.