Categorized | Investing

Confidence of US Builders Dwindles

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For the first time in seven months, the confidence of builders in the United States has fallen. Builder confidence had risen for six straight months, but that trend came to a close in April.

 

The residential real estate market has experienced gains for the past few months, which contributed significantly to the growth in builder confidence. However, some economists believe that the expected increase in foreclosures is starting to take its toll on the builder community.

 

It is due to the anticipated increase in foreclosures that many builders believe that overall sales will drop in the next six months. In general, builders now have a negative outlook on the housing market.

 

The spring buying season got started earlier than usual this year, as many potential homeowners took advantage of the warm weather to look for new homes. Despite the early start, many potential homeowners have not acted on their expressed interest. The lack of action taken by potential homeowners is likely due to the fact that they may want to wait to see what kind of homes go up for foreclosure.

 

Over the last few years, foreclosures have made life and business very difficult for builders. Builders simply cannot compete with low prices of foreclosed properties.

 

There are some regions in the United States in which builders have had great success, though they are few and far between. Builders have done well in New Orleans and Pittsburgh. However, at the national level, they have not been able to replicate that success.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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