Builders' confidence wanes as housing slump continues

Sales of new homes and existing homes are both suffering as the housing market continues its slide from the boom years of 2003 to 2005.

The latest results of the National Association of Home Builders/Wells Fargo Housing Market Index highlight the lack of confidence U.S. builders have in the new-homes market. The index lost four points from June and fell to 24 points in July. That's among the lowest results since the index started in 1985 and is the weakest since the start of 1991, when it sat at 20. (According to the NAHB, an index of 50 means that half of the builders surveyed have confidence in the market. Figures below that indicate lower confidence.)

"The bottom line is that the single-family housing market is still in a correction process following the historic and unsustainable highs of the 2003-2005 period,” said David Seiders, chief economist for the NAHB. “Builders are actively trimming prices and offering buyer incentives to work down their inventories, but meanwhile there is a large supply of vacant existing homes on the market, and affordability problems persist despite efforts to attract buyers."

Read more about the NAHB index here.—Steven H. Saltzman