NEW YORK ( TheStreet) - Homebuilder sentiment held steady at a low reading in August as the usual suspects -- an oversupply of homes, inaccurate appraisal values and tight lending -- kept home purchasers at bay.
"Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values, and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements," said Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a homebuilder from Reno, Nev.
Nielsen said 41% of survey respondents indicated they had lost sales contracts because would-be buyers were unable to sell the homes they currently lived in."The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time," said NAHB Chief Economist David Crowe. "While buying conditions are very favorable in terms of prices, interest rates and selection, consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey." The NAHB's survey came in flat with an August reading of 15, as economists had expected. Homebuilder sentiment had fallen to an eight-month low of 13 in June as a perfect storm of weak existing-home prices, rising material costs, distressed property sales and sluggish consumer confidence brewed in the housing market. The NAHB Housing Market Index measure builders perceptions of current single-family home sales and sales expectations for the next six months. Any reading below 50 indicates poor sentiment. The index has not been above 50 since April 2006.