Homebuilder confidence near record low
Index unchanged in March as economic concerns continue to depress the market.
NEW YORK (CNNMoney.com) -- Homebuilders' confidence remained at a historically low level in March as the weak economy continued to weigh on the market for new single-family homes, according to a report released Monday.
The NAHB/Wells Fargo Housing Market Index held steady at 9 in March, unchanged from February, and up only one point from January's all-time low.
A reading below 50 indicates that more homebuilders view conditions as poor than good. March marked the fifth consecutive month of single-digit readings, and was less than half the reading of 20 posted a year ago.
"The economy continues to be the main drag on home sales activity right now," said NAHB chief economist David Crowe in a written statement. Homebuilders are also concerned about tight credit conditions, Crowe said.
While the overall sentiment was bleak, homebuilders are optimistic about new government programs aimed at boosting the market, particularly a first-time home buyer tax credit.
The Obama administration's $75 billion Homeowner Affordability and Stability Plan, enacted earlier this month, commits $6.6 billion toward refundable tax credits of $8,000 - or 10% of the home's value - for first-time buyers. Previously, first-time buyers could claim a $7,500 credit, but it had to be paid back.
Homebuilders are "hopeful" that this and other economic stimulus efforts "will have a positive impact on consumer behavior and home sales," said NAHB chairman Joe Robson, in a statement.
"But it's still too soon to tell how much of an impact that will be, especially as builders find potential buyers are reluctant because of uncertainty about their future job security and the overall economic outlook," Robson added.
Two out of three of the index's components were unchanged in March, the NAHB said.
The index gauging current sales conditions was unchanged from February at 7 and the index that measures sales expectations in the next six months remained at a record-low 15.