The confidence level of the nation's home builders continues to decline in 2006, falling this month to its lowest reading since June 1995, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
The seasonally adjusted HMI stands at 45, down six points from April's revised reading of 51. An HMI above 50 indicates that more builders view sales conditions as good versus poor.
In the West, builder confidence declined eight points to a seasonally adjusted HMI of 61. According to NAHB, declining demand from investors, rising mortgage interest rates, and continued affordability issues all contributed to the decrease in builders' outlook for the new home market.
All three HMI components declined in May. The indices measuring current and future home sales both fell five points to 54 and 50, respectively, while the component gauging buyer traffic decreased seven points to 32. Home builder confidence edged down across the nation in May.
**taken from the california association of realtors bulletin, dated may 17, 2006.
