Builders getting worried about housing market?

The Commerce Department has reported a 7.8-percent monthly decline in housing starts to an annual pace of 1.96 million units in March, which experts are attributing to rising interest rates, weaker home sales and a jump in inventory.

What may be more important, however, is the new number coming out of the National Association of Home Builders/Wells Fargo
builder sentiment index. It fell to 50 after reaching a high of 72 in June 2005, indicating that builders are equally divided on whether sales conditions are “good” or “poor.”

NAHB chief economist David Seiders says the index has not reached such a level since the 2001 terrorist attacks, attributing the decline to a jump in sales cancellations, a drop in customer traffic and an increase in the use of incentives to attract buyers.

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