Homebuilder Confidence Collapses, Congress Needs To Renew Buyer Credits

Homebuilder confidence for newly built, single-family homes declined for a second consecutive month in July to its lowest level since April 2009, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. The HMI fell two points from a downwardly revised number in the previous month to 14 for July, according to the National Association of Home Builders (NAHB)

The data shows that the recession in the housing market is deepening and the decline may actually match or outdistance the one in 2008 and 2009. Foreclosure rates continue above 300,000 each month and could set a record–more than 3 million–this year.

Home loan rates are at all-time lows but this has not offset the effects of the ending of federal tax credits on April 30 and the high levels of unemployment that have stymied a number of efforts to restart the housing market–the Administration’s $75 billion HAMP program among them.

Congress needs to renew and expand the homebuyers’ tax credit or the housing market will be worse in the second half of this year than it was in the first.

Douglas A. McIntyre