Large Inventories Undermine Builder Confidence

A recent article out from the National Association of Home Builders reports that builder confidence is down. Not surprisingly, builders don't think this is a great time to start a new project as many are faced with large inventories and now need to court agents with large commissions and buyers with swimming pools.

An interesting note: "builder sentiment tends to contract by a greater margin than actual sales and production activity." In other words, builders tend to overreact as a group, which makes sense as they're investors who could stand to lose a lot of money, and they're not necessarily prophets of either success or doom. Also, the undercurrent here is that, if someone has a good notion and some nerve, he or she could do well to buck the trend.

And of course, the article notes that the people who will benefit from this situation is, as in the resale market, the buyer, ie., s/he who is willing and able to buy now.

To view the article, click on the following link:
Builder Confidence