Homebuilder Confidence Fell This Month on Sales Outlook, NAHB Index Shows - Bloomberg

Confidence among U.S. homebuilders fell in April, led by a decline in the outlook for sales, a sign the residential construction market may languish near record-low levels.

The National Association of Home Builders/Wells Fargo sentiment index declined to 16 this month from 17 in March, data from the Washington-based group showed today. A measure of sales expectations for the next six months dropped to the lowest level since October, and a gauge of current purchases also fell. Readings below 50 mean more respondents said conditions were poor.

Housing construction is one of the weakest parts of the economic recovery as a glut of distressed properties on the market competes with new homes. The prospect of more foreclosures in the pipeline, declining prices and an unemployment rate forecast to average 8.7 percent this year means any recovery in housing may take years to develop.

“Homebuilders are finding it difficult to compete with deeply discounted existing properties,” said Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “The backdrop for builders is still negative.”

The measure, which has been at 16 in five of the last six months, was less than the median forecast of 17 in a Bloomberg News survey. Projections among the 47 economists surveyed ranged from 16 to 20.

via bloomberg.com