From the Wall Street Journal:
Home Builders’ Confidence Drops
By JEFF BATER
June 19, 2007; Page D3
The confidence of the nation’s home builders sank in June to its lowest level in 16 years, battered by rising mortgage rates and worries about problems in the market for subprime loans.
The National Association of Home Builders said its housing-market index for sales of new, single-family homes declined to 28, down from 30 in May and the lowest reading since February 1991.
“It’s clear that the crisis in the subprime sector has prompted tighter lending standards in much of the mortgage market, and interest rates on prime-quality home mortgages have moved up considerably during the past month along with long-term Treasury rates,” the trade group’s chief economist, David Seiders, said in a prepared statement.
Mr. Seiders predicted home sales will erode in the months ahead and that improvements in housing starts probably won’t show up until early next year. “As a result, we expect housing to exert a drag on economic growth during the balance of 2007,” he said.
Among the housing-market index’s components, the index for present sales of single-family homes fell to 29 in June from 31 in May. Expectations for sales in the next six months dropped to 39 from 41 in May. The traffic of prospective buyers slipped to 21 from 22.