Home builders’ confidence falls to 16-year low

The outlook for U.S. home building is the worst in 16 years, the National Association of Home Builders reported Monday. The builders’ housing market index fell by two points to 28 in June, the lowest since February 1991.

The market probably won’t turn around until next year, said David Seiders, chief economist for the builders. “We expect housing to exert a drag on economic growth during the balance of 2007.”

The decline was in line with expectations of economists surveyed by MarketWatch. See Economic Calendar.

At 28, the index shows that fewer than one-third of builders think the housing market is good or fair. Builders are concerned about high levels of unsold homes, rising mortgage rates and the continuing “crisis” in the subprime mortgage segment, the industry trade group said. Read more at the group’s Web site.