The National Association of Home Builders/Wells Fargo Housing Market Index
showed that builder confidence in demand for single-family newly built homes has not changed in December from last month's figure of 16.
Two of the three modules of this month's HMI also remained flat, which includes the scale of current sales conditions and the sales expectations for the next six months, meaning that builders aren't expecting relocation to pick up dramatically. The third component measuring the traffic of prospective buyers dropped one point to 11.
Experts note multiple factors are keeping the HMI stuck in neutral. NAHB chairman Bob Jones says, "While the HMI is adjusted for seasonal factors, the typical cold-weather slowdown in sales activity is being accentuated by ongoing weakness in the job market, the rising number of foreclosures and short-sales, and very challenging credit conditions for both builders and buyers."
Foreclosure rates are one of several reasons builder confidence is waning, and some states are hurting more than others. Nevada leads the country in such activity, with 38,429 properties receiving foreclosure filings in the third quarter of 2010, according to RealtyTrac.