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Confidence among U.S. homebuilders fell to a record low in January, a sign the housing slump will extend well into the new year and contribute to deepening the recession.

“Foreclosures are rising and housing activity will continue to decline at least until mid- 2009.”

 

http://www.bloomberg.com/apps/news?pid=20601087&sid=atbRtohsT710&refer=home

 

The National Association of Home Builders/Wells Fargo index of builder confidence dropped to 8, lower than forecast, from 9 in December, the Washington-based association said today. A reading below 50 means most respondents view conditions as poor.

 

 Karen Cordes , an economist at Scotia Capital Inc. in Toronto, who accurately forecast the drop. “Foreclosures are rising and housing activity will continue to decline at least until mid- 2009.”

 

 Supercomposite Homebuilding Index recovered earlier losses, rising 2.6 percent to close at 191.92, as financials led a rebound in stocks on speculation President Barack Obama’s plans will shore up banks. The builder index lost almost a third of its value last year.

 It was forecast to hold at 9 this month, according to the median forecast of 39 economists surveyed by Bloomberg News. Projections ranged from 7 to 11. The gauge, which was first published in January 1985, averaged 16 last year.

Sandy Dunn, a builder from Point Pleasant, West Virginia, said in a statement today. “The Obama Administration and the new Congress have a tremendous opportunity and responsibility to enact legislation that can spur home buyer demand and jump-start the national economy.”

Lawrence Summers, his top economic adviser, said in a letter to lawmakers last week.

 

 

 

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