Ahead Of The Bell: Builder Sentiment

WASHINGTON (AP) - Homebuilders are hoping for a rebound this year after 2010 ended as the worst for new home sales in nearly a half-century.

The National Association of Home Builders releases its index of builder sentiment for February at 10 a.m. Tuesday. The reading has been 16 for the past three months. Any reading below 50 indicates negative sentiment about the market. The index hasn't been above that level since April 2006.

Homebuilders are struggling to compete in a market with millions of foreclosures that are forcing home prices down. Last year was the worst in more than a decade for sales of existing homes, and the worst for new home sales since 1963.

High unemployment, tighter bank lending standards and uncertainty about home prices have also kept many people from buying homes, despite low mortgage rates and home prices that have fallen by more than half in some markets since the peak of the housing boom. The industry received a boost in the first half of 2010 when the government offered tax credits to home-buyers. Once they expired in April, home sales plummeted.

The housing market is expected to show some signs of life this year but the recovery will likely be uneven. Swaths of Florida, Nevada and California continue to struggle through the effects of the housing bust. Weak sales mean fewer jobs in the hard-hit construction industry, which normally helps power economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the builders' trade group.
The all new
CBS News App for Android® for iPad® for iPhone®
Fully redesigned. Featuring CBSN, 24/7 live news. Get the App