Industry News

Builder confidence weakest in 16 years

Subprime lending, rising rates take a toll in June

Builder confidence in June slid to its lowest level since February 1991 as concerns about subprime mortgage lending and rising prime mortgage rates soured the outlook for recovery, according to an industry index. The National Association of Home Builders/Wells Fargo Housing Market Index, which measures builder perceptions and expectations for home sales for the next six months, dropped to 28 this month from a reading of 30 in May. 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. "Builders continue to report serious impacts of tighter lending standards on current home sales as well as cancellations, and they continue to trim prices and offer a variety of nonprice incentives to work down sizeable inventory positions," said NAHB President Brian Catalde in a prepared statement. All three component indexes declined in June, as the index gauging current single-family sales slippe...