Homebuilder Confidence At 11-Year Lows

From Bloomberg:

Homebuilder Confidence in U.S. Declines to an 11-Year Low

Confidence among U.S. homebuilders dropped this month to the lowest in more than 11 years as higher mortgage rates caused sales to fall.

The National Association of Home Builders/Wells Fargo's index of builder confidence declined to 42, the lowest since April 1995, from 46 in May, the Washington-based association said today. A number below 50 means pessimists outnumber optimists. The index hasn't increased for the last eight months, the longest such stretch since 1994.

Fewer home purchases and less building this year will erode consumer spending and slow the pace of economic growth, economists said. Today's report also showed a decline in builders' sales expectations and traffic of prospective buyers.
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A measure of sales expectations for the next six months fell to 50 from 55, and the index of buyer traffic declined to 29 from 33. Both were the lowest since March 1995. The builders group's index of current sales fell to 47, the lowest since May 1995, from 50.
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Confidence fell in all four regions this month, with the biggest decrease occurring in the Northeast, which plunged to 40 from 47. The Midwest declined to 25 from 29, the South fell to 49 from 51 and the West declined one point to 61.
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The number of homes available for sale is 35 percent higher than it was a year ago, according to a Wachovia Securities report on June 6 by analyst Carl Reichardt. The report said the housing slowdown is ``worse than we thought.'' There were 565,000 new homes for sale at the end of April, a record.