Homebuilders are the most pessimistic they’ve been since February 1991, according to the National Association of Home Builders/Wells Fargo Housing Market Index, which was released today. If you’re into numbers, the index for June fell two points to a cycle low of 28.
Here’s a quote from the press release:
“Builders continue to report serious impacts of tighter lending standards on current home sales as well as cancellations, and they continue to trim prices and offer a variety of nonprice incentives to work down sizeable inventory positions,” said NAHB President Brian Catalde, a home builder from El Segundo, California.
The big problems are tighter lending standards, especially in the withering subprime market, and higher interest rates across the board thanks to the runup in bond yields. The NAHB isn’t expecting housing starts to re-accelerate until “early next year.”
In regional results, the Northeast looks healthiest:
The Midwest posted a three- point decline to 19, the South posted a one-point decline to 32 and the West posted a five- point decline to 27. The Northeast recorded a three-point gain to 35 following a six-point loss in May.