Home Builders Short on Confidence

The National Association of Homebuilders announced Tuesday that its home builder sentiment index dropped for the seventh straight month to match the lowest levels ever for the indicator. The NAHB/Wells Fargo Housing Market index dropped 2 points to 20, hitting the record low previously recorded in January 1991. Economists estimated that the index, which began in 1985, would fall to 20. "Certainly, problems across the mortgage finance arena are taking their toll on buyer demand," said David Seiders, chief economist for the NAHB. Seiders sees housing "begin a gradual recovery process" in the third quarter of 2008. The NAHB index that follows sales expectations for the next six months declined to 26, the lowest level in the 22 years of that index's existence. Builders and mortgage lenders hope Tuesday's Fed move to lower key interest rates will help give housing some support. The Dow Jones Home Construction Index jumped 4.8% after the Fed announcement, significantly outpacing the major indexes.

Sources: Reuters, MarketWatch
Commentary: Impac Cuts Workforce, Lending Operations, and Dividend • Is It Time to Hedge Your House?

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.