Earlier this year, the government waved that tax credit as an incentive to get buyers in the door, but now that the freebie is gone, home builders aren't feeling very optimistic about the future. (Still, we get some fun new analogies with today's bad news. And it was about time--raise your hand if you're tired of the "double dip.") Today, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), partly a prediction of single-family home sales and sales, fell 5 points to 17, back to February levels, according to The Atlantic's Daniel Indiviglio. "The HMI is another indicator that shows how little demand exists for residential real estate without the government credit. The hope is that home buying will pick up again quickly, but if purchase fatigue is prolonged, and sales are weak throughout the summer, you can expect this index to decline even further."
And from the Financial Times, it seems that tax credit was really just The Clear. ”The latest housing market figures remind me of what happens when an athlete stops taking steroids,” said Mike Larson, a real estate analyst at Weiss Research. On the upside, "analysts aren’t forecasting another deep slump, but neither are they expecting the housing market to bounce back with a vengeance," according to the Sun-Sentinel.
· Home Builder Confidence Plummets in June [Atlantic]
· US homebuilder sentiment slumps in June [Financial Times]