Industry News

Builder confidence falls for second month

Home buyers react to high prices, interest rates

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Confidence of single-family home builders slid further this month from its summer peak, yet remained well within the positive range, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for December. The overall HMI declined from 61 to 57 in December -- its lowest level since April of 2003, when it stood at 55. The components for current sales and traffic of prospective buyers were each down this time around, by four points to 63 and seven points to 39, respectively. However, the component gauging builder expectations for the next six months held firm at 65. "Many builders sense some tapering off of single-family buyer demand, but remain reasonably confident in the ongoing strength of their markets," said NAHB President Dave Wilson, a custom-home builder from Ketchum, Idaho. "They obviously are reacting to higher interest rates and energy costs, along with some buyer resistance to high house prices." "As expected, the housing market appears...