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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

Home Builder Sentiment Hits Record Low

The National Association of Home Builders, based here in Washington, said a few moments ago that its housing market index has hit a record low in October.

The index is a survey of 446 residential developers across the country who tell the association what conditions are like where they are trying to build and sell houses.

Report: Really, really bad.

How bad?

If the index reads 50 or higher, that means builders feel good about the housing climate.

It now stands at 14.

Here's a quick look at other economic news that has rolled out so far today:

-The Swiss National Bank and the Fed have agreed to buy $60 billion in toxic assets from UBS.

- The cost of living in the U.S. -- judged by the Consumer Price Index -- remained unchanged in September.

- Financial giant Citigroup posted its fourth-straight quarterly loss and will cut 11,000 jobs.

- Industrial production in the U.S. hit a 34-year low in September, thanks to a combo punch from a couple of hurricanes and the ongoing machinists' strike at Boeing.

- New jobless claims from last week jumped higher than expected.

-- Frank Ahrens

By Frank Ahrens  |  October 16, 2008; 1:21 PM ET
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Mr. Ahrens,
For years i have been contacting zoning commissions, City counsels, inspection offices(they issue permits to build), developers and builders on what I seen was a growing problem.
That problem is this,Iowa had a 1.5% population growth, new housing starts came in at 8%+, this simple equation affected 46 other states, and yet no one could see the that the numbers didn't jive!
This has been going on for over 10 years,
They either didn't care or they turned a blind eye to the problem, my guess is the money was to good for them to care.

nation wide, supply continued to out pace demand, as you stated in your video, those with good credit already had a new home,
and since local banks and builders aren't in the business of owning unsold homes,
they were forced to take a risk. They had painted themselves into a corner.

Who was left to market to? Those little greedy bastards who aspired to the American dream, in other words those with little or no credit, no equity or collateral. The serpent dangled the apple and the poor souls took a bite.

I have called builders assc. ,again years ago, that they will have to change their building practices, by that I mean, building smaller dwellings to reflect the income of the remaining market.

So as I see it, we actually built our way into this mess, all the other entities were simply taking advantage of the situation.

The question remains how viable is the building industry as an economic indicator?
If they start building again, who will be their target market?

I am a 26 year Journeyman carpenter,retired
and now run a small remodeling company in
mid-Iowa, I am pretty good at math but do not claim to be an economist, I'm just someone who sees what I'm looking at.

Good job on the video!

Posted by: victorlove | October 16, 2008 3:56 PM | Report abuse

My apologies for the "b" word,my passion over ruled my senses!

Posted by: victorlove | October 16, 2008 4:07 PM | Report abuse

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