The slackened demand for new homes
has kept the National Association of Home Builders monthly index of builders' sentiment unchanged in September at 13 (numbers below 50 connote a negative outlook). For the second consecutive month, the index has remained at an 18-month low
. The index is composed of foot traffic from potential buyers, an estimate of future sales, and current sales figures. Contributing factors include high unemployment
, sluggish job
growth and stricter credit
requirements, which have discouraged people from purchasing homes. A depressed summer, with an increase in foreclosures
and a sharp decline in sales of both new and existing homes, has created a vicious circle: Slow sales of new homes means fewer jobs in the construction business, a key booster in economic recoveries.
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