Home Builder Confidence Jumps, But Still Negative

The National Association of Home Builders housing market index, which tracks industry confidence, jumped four points in April to 19, the highest reading since September.
U.S. home builders are seeing a pickup in sales and customer traffic as homebuyers rush to qualify for tax incentives set to expire at the end of the month. That plus low mortgage interest rates have increased sales for builders.
The current sales conditions jumped five points to 20. The index measuring foot traffic from prospective buyers rose four points to 14, while the index for sales expectations over the next six months increased one point to 25.
When asked to look beyond this month, builders remain less hopeful. Many economists contend the tax incentives are making more buyers pull the trigger now, so sales will drop in the second half of this year. In addition, high unemployment and tight mortgage lending continue to keep many buyers on the sidelines.
Builders also have had to compete with heavily discounted foreclosed homes. More homes were taken over by banks and scheduled for a foreclosure sale than in any quarter going back to at least January 2005, when the foreclosure listings firm began reporting the data.
Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. The report reflects a survey of 417 residential developers nationwide.

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