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| Were New Home Buyers in a Funk in April? |
| Written by Jonathan Smoke | |
| 06.01.2007 | |
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Discuss this article on the forums. (0 posts) For the public builders, the biggest news of the day relates to Hovnanian’s Second Quarter Earnings. According to TheStreet.com: “‘We are frustrated to report that the housing market has continued to slip further in many locations in terms of both sales pace and sales prices,’ CEO Ara K. Hovnanian said in a statement. ‘The housing market weakened in the latter part of the second quarter and the slower conditions have continued into May. Lower prices offered to buyers to close homes during the quarter also led to a further reduction in margins and a net loss for the quarter.’”
 This runs counter to the news reported earlier this week that on a national level, new home sales were actually up in April.Does this mean Hovnanian is suffering alone or perhaps their markets are more hard hit than the nation over all? It could also be that the government’s new home sales data, which is based on a survey, isn’t very reliable, especially when looking at a single month’s results. Of the Hovnanian report, what I found most interesting was they blamed the April gloom on subprime, but not because of credit tightening: “‘While we have felt the sub-prime impact directly in the form of fewer potential homebuyers qualifying for a mortgage as lending standards have tightened, the more significant impact has been indirectly through a further pullback in home buyers' psychology toward making a purchase,’ Hovnanian said.”
Since subprime is no longer in the national news on a daily basis like it was in March and April, maybe this subprime psychological funk worked itself out in May. What do you think? Are home buyers stuck on the fence? 
We're always looking for feedback from our readers.
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