Confidence among U.S. homebuilders was little changed in August, indicating the outlook for housing remains depressed.
The National Association of Home Builders/Wells Fargo index of builder confidence was 15 for a second month, matching the median forecast of 48 economists surveyed by Bloomberg News, data from the Washington-based group showed today. Readings below 50 mean more respondents said conditions were poor.
Sales have failed to rebound at builders like D.R Horton Inc. as unemployment at 9.1 percent and concern about the faltering economy keep away buyers. The industry also is struggling with foreclosures, which boost supply and hurt property prices.
“Builder confidence doesn’t look like it’ll improve much,” Sean Incremona, a senior economist at 4Cast Inc. in New York, said before the report. “Everything seems to be bumping along the bottom. Demand remains very weak.”
Estimates in the Bloomberg survey ranged from 12 to 17. The gauge, which was first published in January 1985, reached a record low of 8 in January 2009 and averaged 54 in the five years before the recession began in December 2007.
Other reports today showed manufacturing in the New York region unexpectedly contracted for a third straight month in August and global demand for U.S. financial assets weakened in June from a month earlier.
The Federal Reserve Bank of New York’s general economic index fell to minus 7.7 from minus 3.8 in July, a report showed. The median forecast in a Bloomberg survey called for an index of zero, the dividing line between expansion and contraction. The so-called Empire State Index covers New York, northern New Jersey and southern Connecticut.
Net buying of long-term equities, notes and bonds totaled $3.7 billion during the month compared with net buying of $24.2 billion in May, according to statistics issued by the U.S. Treasury Department.
The builders group’s measure of sales expectations for single-family homes in the next six months fell to 19 from 21.
An index of current sales rose to 16 this month from 15 in July, the report showed. The gauge of buyer traffic increased to 13 from 12.
“The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase,” NAHB Chief Economist David Crowe said in a statement today.
The confidence survey asks builders to characterize current sales as “good,” “fair” or “poor” and to gauge prospective buyers’ traffic. It also asks participants to gauge the outlook for the next six months.
Confidence among builders in the Northeast had the biggest gain, with the index climbing four points to 19. The Northeast has the smallest survey sample and is therefore subject to greater month-to-month volatility, NAHB has said. It rose one point to 15 in the West and was unchanged at 17 in the South. Builder confidence in the Midwest fell two points to 10.
Combined sales of new and previously owned homes dropped in June to the lowest level of the year, according to reports from the Commerce Department and the National Association of Realtors.
D.R. Horton, the second-largest homebuilder by revenue, last month reported third-quarter earnings that beat analyst estimates as cost cuts helped the Fort Worth, Texas-based company to cushion a decline in revenue.
“Nothing’s really strong out there, and I would reiterate that most of our markets continue to still be soft, softer, and softest,” Chief Executive Officer Donald Tomnitz said on a conference call with investors on July 28.
The median price of a single-family home declined in 109 metropolitan areas out of 150 measured in the second quarter as foreclosures that sell at cut-rate prices devalued real estate, the National Association of Realtors said in an Aug. 10 report.