Housing bears have been warning for months that despite a seemingly good summer, the pain would resume come the fall. This may be the first sign of that. The NAHB’s builder confidence level slipped in October to a reading of 18, less than the expected 20.
Specifically, it seems builders are seeing the effect of the end of the $8,000 homebuyer tax credit, which is why the organisation is pushing for it to be extended.
“It comes as no surprise that after trending upward from an historic low in January, the HMI’s positive momentum now appears to have stalled,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, Okla. “Our economists have repeatedly warned that the approaching expiration of the $8,000 home buyer tax credit on Nov. 30, combined with the massive hurdles that builders face in obtaining construction financing and appropriate appraisals on new homes, could derail the fragile recovery in housing just as it is starting to take shape.
“Congressional action to expand the tax credit and extend it for one year would provide a critically needed boost to the employment market and economy, generating nearly 350,000 jobs, $28.2 billion in wages, salaries and business income and $11.6 billion in additional tax revenues. That’s an opportunity we can’t afford to pass up at this difficult time.”
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