US Homebuilder Index Slips in September
A new data released by the National Association of Home Builders showed a negative sentiment among the industry stakeholders as foreclosures and higher cost of mortgages weaken recovery process.
The US homebuilders’ outlook has slipped by a notch in September as foreclosures and anxiety among homebuyers pull down construction rate and sales activity, an industry data showed on Monday.
In a report, the National Association of Home Builders (NAHB) said that builders’ index slipped to 14 in September 2011 from 15 in the previous month, showing negative sentiments in the US housing market.
The index has been below 20 for the past two years, except for one month.
Also, the builders’ index has not reached 50 since April 2006, when the housing market was in its highest level. Any reading below 50 indicates negative sentiment among the industry.
David Crowe, NAHB chief economist, said that the slow recovery process in the United States, coupled with high unemployment rate, has blurred short-term prospects for the industry.
“The low indexes reflect builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate,” Crowe said.
In 2010, new home sales fell to its lowest level in over 50 years. This year, the housing industry continued to muddle in the slump as builders struggle to compete with foreclosures and higher mortgage costs.