Economy Watch: Homebuilders Remain Dour
Builder confidence remains mired in pessimism; the economy is still the biggest concern for most Americans; and the United States has officially hit its debt ceiling, meaning default looms large.
By Dees Stribling, Contributing Editor
According to the National Association of Home Builders on Monday, builder confidence remains mired in pessimism. Confidence in the market for newly built, single-family homes was unchanged in May, at the basement level of 16. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) index has now remained at this level for six out of the past seven months, a long way below the break between optimistic and pessimistic, which is 50.
Asked to name reasons that potential customers are holding back right now, a whopping 90 percent of builders surveyed say people are worried about being able to sell their existing home, while 73 percent say consumers think it will be difficult to get financing. “Clearly, access to credit for both builders and buyers remains a considerable obstacle to the revival of the new-homes market,” NAHB chief economist David Crowe says in a statement.
Other factors muddying the outlook include competition from distressed property sales; lack of production credit; inaccurate appraisals; and proposals to reduce government support of housing. Some respondents even cited the high price of gas as just another thing to worry about when considering a new home purchase (especially those far-flung new homes, perhaps).
Economy still tops worries among Americans
A Gallup poll conducted during the first week of May has found that one economic issue or another is the “most important problem” facing the United States for nearly three-quarters of respondents (74 percent). The economy in general concerns 35 percent, while unemployment worries 22 percent. Some 12 percent say the federal deficit keeps them awake at night (so to speak), while 8 percent cited energy prices. Five percent say “lack of money” is the nation’s top problem.
The leading non-economic problem–“dissatisfaction with government; poor leadership; corruption; abuse of power”–ranked first among only 8 percent of respondents. Healthcare and education woes were cited by only 5 percent as top worries, same as “lack of money.”
Every month since 2001, Gallup has been asking Americans to specify the most important problem vexing the nation. Unsurprising, the economy moved front and center in respondents’ minds during 2008 and has remained important ever since. The number of Americans citing an economic issue as the nation’s number-one problem peaked at 86 percent in February 2009.
U.S. hits ceiling, Trump says no run
As predicted, on Monday the United States hit its $14.29 trillion debt ceiling. Now the clock is really ticking on a potential default, which Congress has about 11 weeks to forestall, as the U.S. Department of the Treasury employs some accounting legerdemain to avoid default for now.
In what might be the least surprising move of his career, Donald Trump said on Monday that he will not be running for president after all, preferring to remain one of the more famous heads of hair on TV, as well as a real estate businessman of some kind. “Business is my greatest passion, and I am not ready to leave the private sector,” he said in a statement–nor ready to make the kind of disclosure that the public sector would ask of him, presumably.
Wall Street was moderately grumpy on Monday, with the Dow Jones Industrial Average losing 47.38 points, or 0.38 percent. The S&P 500 was down 0.62 percent, and the Nasdaq really took a hit, declining 1.63 percent.