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U.S. Homebuilder Confidence Unexpectedly Fell in June
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| Contributor | kal |
| Last Edited | kal Jun 15, 2009 04:46pm |
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| Category | General |
| Author | By Shobhana Chandra |
| News Date | Monday, June 15, 2009 10:45:00 PM UTC0:0 |
| Description | Confidence among U.S. homebuilders fell unexpectedly in June, indicating that a recovery from the housing slump will be slow to develop.
The National Association of Home Builders/Wells Fargo index of builder confidence decreased to 15 this month from 16 in May, the Washington-based NAHB said today. A reading below 50 means most respondents view conditions as poor.
Builders from Hovnanian Enterprises Inc. to Toll Brothers Inc. continue to report losses as foreclosures mount, worsening the glut of unsold properties and driving down prices at the same time that borrowing costs are rising. Still, other reports show demand is starting to stabilize, which may eventually help residential construction become less of a drag on the economy.
“The housing recovery will be fairly modest and gradual,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, one of two economists in the Bloomberg survey to accurately forecast the homebuilder index. Rising mortgage rates, increases in household savings and the lingering effects of the credit crunch will hinder a recovery, he said.
The Standard and Poor’s Supercomposite Homebuilding Index fell 2.5 percent to 202.48 at 1:40 p.m. in New York. The gauge has fallen 4.4 percent since the start of this year.
The builder confidence index was forecast to increase to 17 this month, according to the median estimate of 40 economists surveyed by Bloomberg News. Projections ranged from 15 to 20.
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