Housing sentiment still punk but not a surprise

The Sept NAHB home builder sentiment index was unchanged at 13 holding at the lowest since March ’09 but was 1 pt below expectations. Both Present Conditions and Future Expectations held at the Aug levels but Prospective Buyers Traffic fell 1 pt to 9, the lowest since March ’09. NAHB chairman said “builders haven’t seen any reason for improved optimism in market conditions over the past month…if anything, consumer uncertainty has increased, and builders feel their hands are tied until potential home buyers feel more secure about the job market and economy.” Also an issue for builders is “the large number of foreclosed properties for sale.” Bottom line, we know the housing market has not responded to historically low interest rates due to the above reasons but also because of the pull forward of demand the tax credit wrought. The S&P’s breaking out to a new high since May tells us there is no surprise either.

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