CAR - Builder confidence in the market for newly built, single-family homes declined one point to 18 in October, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).

NAHB attributes the decline to the quickly approaching deadline of the Federal First-time Home Buyer Tax Credit. Industry groups, including NAR and C.A.R., are calling on their members to contact their congressional representatives and urge them to extend this home-buying incentive.

“This is the first time since November of 2008 that all three component indexes of the HMI have declined,” noted NAHB Chief Economist David Crowe. “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 Nov. 30.”

Crowe also noted that immediate congressional action to extend the tax credit and expand its eligibility beyond first-time buyers could substantially boost sales activity. “In a special questions section of our HMI survey, 85 percent of respondents said that expansion of the tax credit would have a positive impact on their sales,” he said. “That would amount to a very effective stimulus to housing demand and a needed boost to the overall economy.”