WASHINGTON - Builders turned more pessimistic in July than forecast, a sign the expiration of a government tax credit will depress home construction.
The National Association of Home Builders/Wells Fargo confidence index dropped to 14 this month, the lowest level since April 2009, from 16 in June, data from the Washington-based group showed Monday. Readings under 50 mean more respondents said conditions were poor.
The retreat in sales, following the April 30 expiration of a deadline to sign purchase agreements and qualify for a tax credit worth up to $8,000, is lasting longer than projected, the report said. With mounting foreclosures adding to housing inventory and unemployment forecast to end the year at 9.5 percent, a housing recovery will take time to develop.
The index was forecast by economists to fall to 16 from a previously reported 17 in June.