U.S. homebuilder confidence failed to improve in December, holding to the same record low for a third straight month. The National Association of Home Builders/Wells Fargo index was 19, as expected by economists; any number below 50 indicates a low measure of confidence on the part of homebuilders. The reading is the lowest since the index began tracking homebuilder sentiment in 1985. Treasury Secretary Hank Paulson told a town hall meeting in Orlando Monday housing market woes will "take some time" to work themselves out. Douglas Smith, chief economist for the Americas at Standard Chartered Bank in New York, sounded a similar note saying, "In the near term, we shouldn't have a lot of high hopes."
Despite scaled back building on the part of homebuilders trying to work off excess inventory, increased foreclosures and tighter lending practices have meant the housing glut has continued unabated. "Builders continue to look for signs of improvement in the ongoing mortgage market crisis that is weighing on housing and the overall economy," NAHB President Brian Catalde said. Further exacerbating problems, many potential buyers are holding out for home prices to drop even more, keeping current ‘for sale’ units on the market for extended periods of time. Tuesday sees reports on November Housing Starts and Building Permits; both numbers are expected to continue their trend of monthly declines.
Additional Reading: Housing Market Tracker - Foreclosure Data Review ? Housing Market Tracker - Subprime Review
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