Industry News

Builder confidence declines again

Subprime 'shakeout' impacts sales, cancellations

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Deepening problems in the subprime mortgage market continued to take a toll on builder confidence in April, which sent the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) down another three points in April. Based on a monthly survey that measures builder perceptions and expectations for home sales, the index dropped to 33 in April from a reading of 36 in March. An index rating above 50 indicates that more builders view sales conditions as good, while a rating below 50 indicates that more builders view conditions as poor. "The tightening of mortgage lending standards in connection with the subprime crisis has shaken the confidence of both consumers and builders, as reflected in this report," NAHB Chief Economist David Seiders said in a statement. "Indeed, the unfolding effects of this crisis have compelled NAHB to trim our forecasts of home sales and housing production for both 2007 and 2008," he said. "While we still expect to see some improvements in housi...