The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index fell from 19 in September to 18 for October. Readings below 50 on the index indicate home builders are not confident in the state of their industry.
The decline in confidence for those who use construction equipment to build homes was tied to an expiring tax credit. The first-time home buyer tax credit gives consumers $8,000 as an incentive to buy a new home. The tax credit is set to end on November 30 of this year.
"Clearly, builders are experiencing the effects of the expiring tax credit on their sales activity, since it would be virtually impossible at this point to complete a new home sale in time to take advantage of that buyer incentive before November 30," David Crowe, chief economist for the NAHB, said.
Along with builders not being confident, consumers in general are feeling a bit blue when it comes to the economy. Recently, the preliminary Reuters/University of Michigan Survey of Consumers noted that consumer confidence fell from 73.5 in September to 69.4 in October.
