The confidence level of the nation's home builders continues to decline in 2006, falling this month to its lowest reading since April 1995, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The seasonally adjusted HMI stands at 42, down four points from May's revised reading of 46. An HMI above 50 indicates that more builders view sales conditions as good versus poor. According to NAHB, declining demand from investors, rising mortgage interest rates, and continued affordability issues all contributed to the decrease in builders' outlook for the new home market.
All three HMI components declined in June. The component measuring sales expectations declined five points to 50, while the components gauging current single-family sales and buyer traffic decreased to 47 and 29, respectively. Home builder confidence edged down across the nation in June, and in the West builder confidence declined one point to a seasonally adjusted HMI of 61.
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