Builders' Confidence Dropping from 2005
June 5, 2006,
Washington — With mortgage rates rising and consumers fretting about whether they can afford to buy a new home, the outlook for the nation's single-family home builders is becoming more problematic, according to a monthly gauge of builder sentiment.
NAHB continues to maintain that a “soft landing” scenario is being tracked. “Based on historical experience, particularly the 1994-1995 episode,” said the monthly report, the downward trend-line in builder sentiment “is not inconsistent with the orderly cooling-down process we're projecting for home sales and single-family housing starts in 2006,” said David Seiders, chief economist of the builders' trade group.
“We expect new-home sales to be off by 12% from the record posted in 2005. Single-family starts, supported by large builder backlogs of unfilled orders and reconstruction in the wake of last year's record-breaking hurricane season, should be down by about 7% from the 2005 record.”