| Builder confidence for new single family homes has | | | | predictions for the next six months. This index fell from |
| continued its decline in July. According to the National | | | | 51 to 46.The index of current sales of new family |
| Association of Home Builders/Wells Fargo Housing | | | | homes fell four points to 43. The index of prospective |
| Market Index, builder confidence for new single family | | | | buyer traffic decreased two points to 27.The only |
| homes has declined three additional points to 39.The | | | | region to experience an upturn in builder confidence |
| drop is attributed to increased concerns of interest | | | | was the South, up two points to 50. Yet, that mark |
| rate increases and housing affordability, according to | | | | remains well below the 77 score of June 2005. The |
| the NAHB.The index measures builder perceptions of | | | | index in the Northeast was down to 36, while the |
| current new single-family home sales, and the | | | | Midwest dropped to 21.The West had the largest |
| expectations of builders for the next six months. The | | | | decline in confidence, down nine points to 51."In terms |
| perceptions are rated "good, "fair" or "poor."The scores | | | | of historical comparison, the HMI's movement is |
| are compiled and adjusted according to a seasonal | | | | essentially in line with readings from the 1994-95 period |
| index. Numers under 50 indicate that sales are | | | | when the Federal Reserve tightened monetary policy |
| considered poor."The HMI is down from its most | | | | and a fairly orderly cooling-down process occurred in |
| recent cyclical high of 72 in June last year, and reflects | | | | the nation's housing markets," Seiders explained."That is |
| growing builder uncertainty on the heels of reduced | | | | what our forecasts anticipate happening in the current |
| sales and increased cancellations related to eroding | | | | period, provided the downside risk of rising interest |
| affordability as well as an ongoing withdrawal of | | | | rates and a bail-out by investors/speculators do not |
| investors/speculators from the market place," said | | | | become too pronounced," he said. "With respect to |
| NAHB Chief Economist David Seiders."But just as | | | | interest rates, we expect the Federal Reserve to |
| concerning to many builders is the potential for more | | | | maintain the current 5.25% target for the federal funds |
| monetary tightening by the Federal Reserve that could | | | | rate for some time, and we're projecting only modest |
| drive interest rates, and thereby homeownership costs | | | | increases for long-term interest rates from current |
| even higher. Ironically, the Fed's inflation-fighting moves | | | | levels."Martin Lukac represents and a finance |
| have helped firm up the rental market and raise the | | | | web-company specializing in real estate and mortgage |
| 'owners' equivalent rent' components of the core | | | | rates. We specialize in daily updates, mortgage news, |
| inflation measures that the Fed is seeking to contain."All | | | | rate predictions, mortgage rates and more. Find low |
| three indices fell this month, with the most dramatic fall | | | | home loan mortgage interest rates from hundreds of |
| occurring in the index which measures sales | | | | mortgage companies! |