Home Builders Continue Decline

Washington — Growing more cautious in an uncertain, post-Katrina economy, confidence levels among the nation's home builders declined for a third straight month in September, hitting its lowest level since July 2003.

A monthly measure of builder sentiment compiled by the National Association of Home Builders (NAHB) and Wells Fargo Bank, fell two points to a level of 65.

“Many builders appear to be taking a more cautious attitude because of uncertainties in the economy and this post-Katrina environment, particularly with regard to sales expectations in the near term,” said Dave Wilson, NAHB president.

“As expected, the housing market is beginning to show signs of cooling and builders are reacting to that,” said David Seiders, NAHB chief economist. While the survey was taken immediately following Hurricane Katrina in early September, a number of factors are likely at work, said Seiders, and Katrina's impact is only part of the equation.

In general, said Seiders, concerns about rising interest rates down the line and some buyer resistance to high home prices is taking its toll. Further, he said, rising gas prices “not only drive up the cost of doing business, but also cause some people to rethink their decision to live in further-out communities.”