Home Builder Sentiment Slips

Home builder sentiment has slipped backward in June following five straight months of gains from its record lows, the National Association of Home Builders said today.

The trade group surveys 548 residential developers nationwide to gauge how they think their sector is doing.

Anything below a 50 on the index represents home builder pessimism. The index hit its all-time low of 8 in January, and had been ticking up slowly since then, hitting 16 last month.

In June, so far, it has retreated one point to 15.

In the scheme of things, a one-point move in a subjective "index" means little. But it does reflect how cautious or audacious builders are feeling about the economy.

The overbuilt U.S. still has a bursting-at-the-seams 11-month inventory of unsold new houses. Until that gets sold, or bulldozed, down to about six months, you won't see a real improvement in the housing market, which most believe is the key to a lasting recovery.

-- Frank Ahrens
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