“The spring home buying season is getting off to a slow start due to persistent concerns about home values as more foreclosures seem to be hitting the market, increasingly restrictive lending requirements for home buyers and builders, and the slow pace of economic recovery,” acknowledged NAHB Chief Economist David Crowe.
“While pockets of improving activity are appearing in some markets, the best sales activity appears to be happening in the lower price ranges, where first-time buyers have greater flexibility than repeat buyers who must sell their current home,” he added.
The housing market has stumbled badly heading into 2011. Nasty weather in parts of the country may have played a role, but it appears that potential buyers are holding off amid worries that the drop in prices may not be over.
In addition, the economic recovery thus far has failed to produce a significant number of new jobs, which has also dampened enthusiasm for new and existing homes.
Traffic has been improving in recent months and that may eventually translate into a firmer new home market, but sales continue to languish and lackluster builder sentiment is a good reflection of the tough environment.
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