The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

The July NAHB homebuilder sentiment survey continued to soften, falling to 14 from 16 to the lowest since April ’09 and below expectations of 16. With the home buying tax credit no longer available to 1st time home buyers, the decline is not surprising. What is more surprising is why builders were optimistic in May (NAHB # was 22) after the April 30th expiration. Present Conditions fell 2 pts to 15 and the Outlook fell 1 pt to 21. Prospective Buyers Traffic fell 3 pts to 10. Buyers Traffic suffered in the 2 regions with the most amount of foreclosure competition for the builders, the West and the South while they rose in both the Northeast and Midwest. Bottom line, while we can easily blame the expiration of the tax credit for the drop off, according to the NAHB, “builders are reporting continuing consumer hesitancy regarding home purchases due to uncertainty in the overall economy and job markets.”