Despite mortgage rates near record lows, few Americans are
interested in taking on debt to buy new homes - and their reticence
is sending homebuilder confidence to levels not seen since early
According to the National Association of Home Builders, a trade
group, builder confidence plummeted in July. The all-time low in
the organization's sentiment index - 9 - was reached in January
2009, but the present-day index value of 13 isn't much higher.
"Today's report reflects single-family home builders' concerns
about current and future economic conditions and about the
increasing hesitancy they are seeing among potential home buyers,"
NAHB chief economist David Crowe said.
That sense of hesitancy was reinforced last week by the Mortgage
Bankers Association, another industry group. The MBA said
purchase-loan activity remains moribund, despite 30-year mortgage
rates at an all-time low of 4.57 percent.
Purchase activity, the organization reported, is 34.1 percent lower
than it was last August - and refinances are making up a
disproportionate share of the mortgage mix. Refinance applications
represented 78.1 percent of total mortgage activity last week.
By Steve Monfort