Confidence among U.S. homebuilders was unchanged in August at a record low, signaling there is no relief in sight from the worst housing slump in a quarter century.
The National Association of Homebuilders/Wells Fargo sentiment index held at 16 for a second month, the Washington-based group said today. Readings under 50 mean most respondents view conditions as poor.
Builders are delaying projects as sales drop, foreclosures throw more houses on the market and prices tumble. Job losses, stricter lending rules and growing buyer pessimism indicate builders will need to cut prices further to stimulate demand.
“Homebuilders are seeing few bright spots in the sales picture right now,” said Abiel Reinhart, an economist at JPMorgan Chase & Co. in New York. That’s “no surprise given that mortgage rates are up, lenders keep tightening their standards, the economy is weak, and there are many existing home sales competing for buyers.”
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