Homebuilders less confident in housing market

The National Association of Home Builders said Monday its seasonally adjusted housing market index fell to 14 in July. It was the lowest level since March 2009. June's index level was revised downward to 16.  Readings below 50 indicate negative sentiment about the market.

BOTTOM LINE

The last time the index was above 50 was in April 2006.  Don't expect good news any time soon.  The housing slump will be a ten year process to correct itself.  Still, the trade group's latest survey of 502 residential builders nationwide suggests the market will remain sluggish for the rest of the year. Builders have sharply scaled back construction in the face of a severe housing market bust. The number of new homes up for sale in May fell to 213,000, the lowest level in nearly 40 years. But due to the sluggish pace of sales, it would still take 8.5 months to exhaust that supply, above a healthy level of about six months. 

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