Homebuilders down Monday, September 18, 2006
WASHINGTON - A measure of home builders' views of the housing market declined in September for the eighth straight month, to its lowest point since February 1991, the National Association of Home Builders (NAHB) said Monday.
The NAHB's Housing Market Index, which measures builders' perceptions of new single-family home sales and near-term sales prospects, fell to 30 in September from a revised figure of 33 in August. A reading below 50 indicates that many builders see conditions as "poor."
David Seiders, NAHB chief economist, said lowered expectations persisted despite significant sales incentives offered by builders.
"Builders are adopting an increasingly cautious attitude in their near-term outlook for new-home sales," Seiders said. "They're experiencing falling sales, rising sales cancellations and increasing inventories of unsold units."
Seiders said the housing market is adjusting from the "record-breaking and unsustainable highs" reached in recent years. He forecast that the index will flatten by the middle of next year and "gradually" recover in 2008.
The index, compiled by the NAHB and Wells Fargo, showed declines in three of four regions in September. The Northeast saw the largest decline, from 34 to 28, while the West fell from 43 to 38 and the South saw a three-point drop to 38. The Midwest remained at 16.
Shares of leading home builders were mixed in afternoon trading. Toll Brothers Inc. rose 15 cents to $28.24 on the New York Stock Exchange, while Hovnanian Enterprises Inc., gained 2 cents to $29.32. Pulte Homes, added 21 cents at $32.18.
The NAHB's Housing Market Index, which measures builders' perceptions of new single-family home sales and near-term sales prospects, fell to 30 in September from a revised figure of 33 in August. A reading below 50 indicates that many builders see conditions as "poor."
David Seiders, NAHB chief economist, said lowered expectations persisted despite significant sales incentives offered by builders.
"Builders are adopting an increasingly cautious attitude in their near-term outlook for new-home sales," Seiders said. "They're experiencing falling sales, rising sales cancellations and increasing inventories of unsold units."
Seiders said the housing market is adjusting from the "record-breaking and unsustainable highs" reached in recent years. He forecast that the index will flatten by the middle of next year and "gradually" recover in 2008.
The index, compiled by the NAHB and Wells Fargo, showed declines in three of four regions in September. The Northeast saw the largest decline, from 34 to 28, while the West fell from 43 to 38 and the South saw a three-point drop to 38. The Midwest remained at 16.
Shares of leading home builders were mixed in afternoon trading. Toll Brothers Inc. rose 15 cents to $28.24 on the New York Stock Exchange, while Hovnanian Enterprises Inc., gained 2 cents to $29.32. Pulte Homes, added 21 cents at $32.18.
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