Confidence amongst homebuilders fell to a new all-time low in January, according to a report issued by Wells Fargo and the National Association of Home Builders (NAHB) on Wednesday.

The housing market index dropped to a reading of 8 in January, following the previous record low reading of 9 in December and November.

The index, which has a 22-year history, consists of three components.

The sales expectations component increased one point to 17 in January, while the present housing component for single-family homes fell two points to 6. The component looking at traffic of prospective buyers grew one point to eight.

Over the past three years, the index has fallen from 61 to a reading of 8. A rating above 50 indicates optimism from homebuilders; below 50 indicates pessimism. The all-time low prior to the current credit crunch was 19.

By Steve Stecyk and edited by Nancy Girgis
©CEP News Ltd. 2009