"Though the gains have been incremental, the fact that builder confidence has improved over the past two months is encouraging," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich.
"Many builders are reporting that while the quantity of buyer traffic through their model homes has not improved dramatically, the quality of that traffic seems to be getting better – meaning that more people appear to be serious about buying in the near future. Builders remain very concerned, however, about the lack of available financing for new-home construction at a time when inventories of completed new homes are quite thin; after all, you can't sell what you can't build."
We are seeing incremental gains in builder confidence, though at current levels, sentiment remains very depressed.
With the exception of the artificial increase tied to the tax credits that expired at the end of April, overall builder confidence appears to have barely broken out of the downward trend that reestablished itself over a year ago.
Extraordinarily low mortgage rates may be helping at the margin, but low rates have not provided the support that the beleaguered housing market desperately needs.
A winding down of foreclosures, which competes with new homes, rising consumer confidence, stabilization in home prices and a falling unemployment rate would go a long way in solving what ails the new home market.
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