Home builders are becoming more pessimistic on the recovery of the housing market as the index measuring their confidence levels fell for the third-straight month in August.

According to the National Association of Home Builders, its monthly index of builders’ housing market sentiment fell to 13 points, the lowest since March last year. The index, which is broken into three separate readings, also showed that market expectations for the next six months dropped by three points to 18, while sentiment for current sales conditions fell by one point to 14. Builders’ confidence on foot traffic from prospective buyers, on the other hand, remained at 10 points.

Market analysts and builders blamed the dismal readings to the weak job market and the high foreclosure rate. According to the report, almost 90% of 462 builders surveyed claimed that foreclosures have hurt their business. Builders said consumers opt to purchase foreclosed properties because they are way cheaper than newly constructed homes.

“Builders are expressing the same concerns that they are hearing from consumers right now, particularly the sense that the overall economy and job market aren’t gaining any traction,” said Bob Jones, a builder from Bloomfield Hills, Michigan.

Mike Larson, a real estate analyst at Weiss Research, agreed. He said unless the job market improves and buyers start “stepping up to the plate,” it would take a longer amount of time for the housing market to fully recover.

With the sluggish economy and more home builders losing confidence on the recovery of the real estate market, do you think there is still hope for the housing sector? Share to us your thoughts on this issue by joining our forums. Log in or type in your email address below to register.