Homebuilders gloomy over record low
The monthly housing market index is reporting a 14-year low on new homes, making homebuilders' outlook less optimistic than usual. Amy Scott tells us when homebuilders hope to see things turn around.
A new housing complex as soon from above in Orlando, Florida (Jeff Haynes/AFP/Getty Images)
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Scott Jagow: The National Association of Home Builders has even more reason to be gloomy. And they are. The group comes out with its monthly housing market index today, and it may hit an all-time low. Amy Scott reports.
Amy Scott: If real-estate developers are down in the dumps, things must be pretty bad.
Christopher Thornberg with Beacon Economics says homebuilders are usually the ultimate optimists:
Christopher Thornberg: These guys always see the good side of things. You go back a year, a year and a half ago, and these guys were believing the nonsense. Their surveys were relatively positive.
Not anymore. Last month, homebuilders' sentiment fell to its lowest level since the index debuted almost 28 years ago. In September, ground-breaking on new homes plunged to a 14-year low. Construction figures for October come out tomorrow.
Thornberg says past cycles suggest the market could bottom out halfway through 2009.
Thornberg: I would argue that this is gonna be worse, just because it's so much bigger than it has been in these past cycles.
But the National Association of Home Builders is, naturally, more optimistic. The group predicts the housing market will start to turn around in the middle of next year.
In New York, I'm Amy Scott for Marketplace.
