The National Association of Home Builders/Wells Fargo confidence index dropped to 13 this month, its lowest level since March 2009 - a sign the expiration of a government tax credit will keep depressing home construction. According to a Bloomberg News survey estimate, economists had forecast a reading of 15.
Builders are competing with increasing numbers of cheap foreclosed homes. Last month, home seizures climbed 38 percent in the second quarter from a year earlier, a figure that could translate into lenders claiming more than 1 million properties this year.
Confidence levels lower than 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. This is the third straight month homebuilder confidence has dropped.
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