WASHINGTON (AP) – Homebuilders have yet to see a turnaround in the housing market after the worst year for new-home sales in a half-century.
The National Association of Home Builders said Tuesday that its index of builder sentiment for February remained unchanged for the fourth straight month at 16. Any reading below 50 indicates negative sentiment about the market. The index hasn't been above that level since April 2006.
Homebuilders are struggling to compete with millions of foreclosures that are forcing home prices down. Last year was also the worst in more than a decade for sales of existing homes.
Weak home sales mean fewer jobs. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the trade group.
High unemployment, tighter bank lending standards and uncertainty about home prices have also kept many people from buying homes. Mortgage rates had been at the lowest levels in decades, but have since started to rise.
"Builders are telling us that some pockets of optimism have begun to emerge, but many prospective purchasers are concerned about selling their existing home in the current market," said David Crowe, the home builders group's chief economist.
Many analysts say the housing market is expected to show some signs of life this year but the recovery will likely be uneven. The latest regional data showed builders are becoming more optimistic in the Northeast and South and dimmer in the Midwest and West. And while hopes for improved single-family sales now and over the next six months improved, the amount of foot traffic by prospective buyers remained flat.
The true test of whether the housing market will rebound will come in spring, when the peak time of year for home-buying.
"It really does boil down to the spring-buying season," said Carl J. Riccadonna, a senior U.S. economist with Global Markets Research. "There are signs that we're starting to claw back from the bottom. As long as it's flat-lining during the winter, it's the spring that will tell the tale."
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