Builder: No Housing Market Recovery Until April

The sagging U.S. housing market probably will not rebound before April, as the presidential race narrows down and national confidence improves as a result, the head of a luxury home builder said.

“I see no reason to expect a change in confidence until probably April 2008, when candidates will fairly well be settled for the presidential election and we’ll start to listen to speeches about how we’ll get better,” Robert Toll, the chairman and chief executive of Toll Brothers Inc., said.

Many industry executives, including Toll, attribute the anemic market to low buyer confidence, despite a healthy economy, strong employment and relatively low mortgage rates, currently around 6.7 percent.

“(My) personal view is that it will be a very quick and strong rebound” fueled by a release of pent-up demand for new homes, Toll said.

“We’re not into this recession in housing for a long period compared to the other downturns.”

However, all bets are off if the U.S. economy retreats, he said. Judging by typical U.S. home-buying patterns, home builders will have to wait about a month to get an indication of the direction of the housing market.

Historically, one of the strongest home-buying seasons has been between the Super Bowl and Easter, although this year that strength failed to materialize.

Home buyers usually reemerge after the July 4 holiday, so builders are hoping for an increase in mortgage applications starting next week.

“The next serious indication you’ll get of what the market looks like will come probably three weeks after July 4,” the home builder said. “I would look at the tea leaves then to see if there’s any indication that then.”

Asked about his recent criticism of U.S. Treasury Secretary Henry Paulson’s view of the housing market, Toll said: “I didn’t criticize. I suggested that he was wrong.”

In May, Paulson told CNBC he believed the U.S. housing market’s troubles were largely over, despite persisting bad credit mortgage worries. Shortly after, Toll told the Financial Times that Paulson’s remarks surprised him.

“He got statistics and I think was misled or misread; one or the other,” Toll said. “I just thought that was going to appear to be silly. I think I have been borne out. I don’t see anybody suggesting that happy times are here again.”

The National Association of Realtors said sales of homes fell to their lowest levels in four years, while the supply of homes for sale rose to its highest level since 1992.

SOURCE: Reuters