Confidence among United States homebuilders is continuing to decline, according to recent articles posted in the Wall Street Journal and Bloomberg.com. Many potential home buyers are being scared away by more stringent lending rules as well as plummeting home values.

According to the Wall Street Journal, the National Association of Home Builders/Wells Fargo, the index of builder sentiment is still holding at 20; but that’s still better than 18, which is the all time low that they were at back in December of 2007. The Wells Fargo index is a chart that shows how respondents view the recent market conditions. If the levels fall under 50, then that means that the respondents view the conditions to be poor; and as many can see, we are well below the mark, hence the hesitation of potential home buyers.

Consequently, builders are reluctant to undertake new projects as the overall number of houses that have been sold has, once again, continued to decline for the third year in a row. Some areas, such as Raleigh, NC, have been lucky enough where the housing market crisis hasn’t hit quite as hard. However, this doesn’t mean that we haven’t been affected. Recent reports show that the Triangle area has also been on an overall decline.

Future Predictions

“We’ve got a long way to go before the market moves back into balance. We think building activity will remain restrained through the next four years.”

-Mark Vitner-

Senior Economist, Wachovia Corporation (borrowed from Bob Willis, Bloomberg.com)

Recent housing statistics from a Commerce Department report showed that housing in the United States declined 5.2 percent in March, according to the median estimate in a Bloomberg survey of economists. The declining home prices are leaving increasing numbers of homeowners feeling less inclined to spend their money on new houses, which might spell trouble for future home owners.

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Tags: Triangle Real Estate, real estate //