According to a report just released, homebuilders’ confidence remained at drastically low levels for the month of March. This reason for this is that the poor economy is still weighing heavily on demand for new single-family homes. In this report, the Wells Fargo Housing Market Index was unchanged from February while up only slightly from January’s all-time low. Also weighing on homebuilders confidence is the tight credit conditions that exist now. Although the situation looks bad, homebuilders are hopeful that some of the new government programs, such as the first-time homebuyer tax credit, will help improve this situation. Even with this tax credit, possible homebuyers are still being cautious, as they are still nervous about their job security and the overall economy.
The rise in foreclosures for the month of February has surprised many experts. The number of foreclosure filings was up 6% from the month of January. This result was unexpected as a downward movement was predicted due to the different foreclosure freezes that were enacted. These freezes were led by the big mortgage companies such as Freddie Mac, Fannie Mae as well as other large banks. A big reason why so many people are losing their homes to foreclosure is because the values of their homes have dropped to very low levels. When people owe so much more than their homes are worth, also known as being underwater, they no longer have the reason to keep up with their mortgage payments. It is easier to just walk away.