Builders are looking around at the real estate landscape and are not very happy. They enjoyed the run up to the expiration of the tax credit, but now we are in the hangover stage.
Confidence has dropped significantly. From an already anemic rating of 22 for sales the index dropped to 17. Experts predicted that the drop would only be to to 21 in the National Association of Home Builders/Wells Fargo Housing Market Index.
Like Cash for Clunkers, the tax credit is looking to have just subsidized people to make a purchasing decision earlier. The actual market activity stretched over a period of time is not changing all that much.
Real estate industry types, don’t spend all of your commission checks from the closings in the next month. They may have to last a while.
Each of the HMI’s component indexes recorded declines in June. The component gauging current sales conditions fell five points to 17, while the component gauging sales expectations for the next six months declined four points to 23 (from a one-point downward revised index level of 27 in May) and the component gauging traffic of prospective buyers fell two points to 14.
The HMI also posted losses in every region in June. The Northeast, which has the smallest survey sample and is therefore subject to greater month-to-month volatility, fell 17 points to 18 following a 14-point jump in May. The Midwest posted a three-point loss to 14, while the South also registered a three-point decline to 19 and the West fell four points to 15 from a revised May level of 19. via NAHB