Builders glum despite uptick
WASHINGTON — Builders are pessimistic about the housing market, but are seeing a little more foot traffic after the worst summer for home sales in a decade.
The National Association of Home Builders said yesterday that its monthly index of builders’ sentiment rose this month to 16, the first increase in five months. The index had been at 13 for the past two months, the lowest level since March 2009.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. This month’s reading was equal to June’s.
The index is broken into three readings, and all of them increased this month. Expectations rose by five points, the outlook for sales conditions improved by three points, and builders’ view of foot traffic increased by two points.
“Builders are starting to see some flickers of interest among potential buyers, and are hopeful that this interest will translate to more sales in the coming months,’’ said Bob Jones of Bloomfield Hills, Mich., the trade group’s chairman.
High unemployment, slow job growth, and tight credit have kept people from buying homes. The housing market suffered its worst summer in more than 10 years, despite the lowest mortgage rates in five decades.
This fall’s home sales may improve, but not by much. A huge backlog of foreclosed properties is dominating the market.
Plus, many of the foreclosures could be challenged in court because of revelations that banks evicted people without reading the paperwork.