Home builders' confidence in a near-term housing recovery sank to a new all-time low this month. The National Association of Home Builders, which started a market index in January 1985, said that barometer tumbled 5 points to 9 in November, reflecting growing worries about the U.S. financial crisis, rising unemployment and weakening consumer confidence.
Index readings higher than 50 indicate positive sentiment about the market. But the index has drifted below 50 since May 2006 and below 20 since April.
Also yesterday, the National Association of Realtors said that 120 out of 152 metropolitan areas it tracks saw the median home sale price decline in the July-September quarter compared with a year ago. Nationally, sales fell by almost 8 percent compared with last year.
Sales fell in all but four states. The exceptions were Nevada, California, Arizona and Virginia, where buyers have been able to snap up foreclosed homes at a bargain.
Foreclosures and other distressed sales made up about 40 percent of transactions in the quarter, dragging down the median sales price by 9 percent from a year ago to $200,500.
Builders and Realtors alike have grown increasingly convinced that only government intervention will help stem the downward spiral in home prices and rising foreclosures.
"We are in a crisis situation," Sandy Dunn, chairman of the builders' association, said in a statement. "Tremendous economic uncertainties have driven consumers from the housing market, and it's going to take some major incentives to bring them back."
In recent weeks, home builders have ratcheted up pressure on Congress to take steps that go beyond trying to reduce foreclosures. The industry wants lawmakers to enact new incentives aimed at getting reluctant homebuyers back into the market.
Specifically, the group is asking for a 10 percent tax credit of up to $22,000 for homebuyers who purchase a home over the next year and a temporary interest-rate reduction on 30-year mortgages. The Realtors group also seeks housing assistance.
The Associated Press and New York Times News Service contributed to this article.
SALES CHANGES
Median sales price of existing homes and percentage change for the third quarter:
Baltimore-Towson: $279,200, -4.2 percent
Cumberland: $102,500, -4.8 percent
Hagerstown-Martinsburg: $181,500, -12.9 percent
Philadelphia-Camden-Wilmington: $241,100, -0.8 percent
Washington-Arlington-Alexandria: $332,700, -24 percent
Source: National Association of Realtors
