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Builder Confidence Down 46% Year-to-Year

Washington — As sales of new homes continue to cool, now off by more than 17% since last July, the nation's home builders are growing more antsy and cooling their jets, and a June canvass of builders shows their confidence level continues to wane.

The monthly index of builder confidence compiled by Wells Fargo Bank and the National Association of Home Builders slipped three more notches in June to a current reading of 39. The barometer of builder sentiment has now fallen by 46% from a reading of 72 in June of last year.

The year-long slide “reflects growing builder uncertainty on the heels of reduced sales and increased cancellations related to eroding affordability, as well as an ongoing withdrawal of investors and speculators from the marketplace,” said David Seiders, chief economist of the National Association of Home Builders.

“But just as concerning to many builders is the potential for more monetary tightening by the Federal Reserve that could drive interest rates, and thereby home ownership costs, even higher.”

All three components of the index fell in June: current sales, expectations for sales over the next six months, and traffic from prospective buyers.

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