US home builder sentiment slid in July to its lowest since January 1991 as fallout from the housing slump and subprime mortgage crisis caused a glut of new homes, the National Association of Home Builders said yesterday .
The NAHB/Wells Fargo Housing Market index fell to 24 from 28 in June, the group said. Economists polled by Reuters had thought it would slip to 27. Readings below 50 mean more builders view market conditions as poor than favorable.
“The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003-2005 period,” NAHB chief economist David Seiders said in the statement.
Home builders are struggling to unload excess inventories left to them as speculators abandon contracts and buyers find it harder to obtain mortgages. Soaring delinquencies on the riskiest loans have forced lenders to boost requirements for many borrowers, locking out customers who might previously have qualified, analysts said.
Affordability problems are persisting even as builders cut prices and offer buyer incentives, Seiders said.
Declines were seen in all four regions of the United States, with the Northeast and South registering the largest drops.