Homebuilder confidence falls to an 11-year low.
Confidence among U.S. homebuilders dropped to an 11-year low this month amid a glut of unsold homes and rising mortgage rates.
The National Association of Home Builders/Wells Fargo’s index of builder confidence declined to 42, the lowest since April 1995, from 46 in May, the Washington-based association said today. A number below 50 means pessimists outnumber optimists.
Industry groups say home sales will fall in 2006 for the first time in six years, and builders such as KB Home are cutting profit forecasts. The drop in confidence, along with declining housing starts, is evidence that 16 consecutive interest-rate increases by the Federal Reserve are starting to cool the economy, economists said.