Builder confidence in the market for newly built, single-family homes held unchanged at a low level of 15 on the NAHB/Wells Fargo Housing Market Index (HMI) for August, which was released on Aug. 15.

“Builders continue to confront the same major challenges they have seen over the past year, including competition from the large inventory of distressed homes on the market, inaccurate appraisal values and issues with their buyers not being able to sell an existing home or qualify for favorable mortgage rates because of overly tight underwriting requirements,” said NAHB Chairman Bob Nielsen.

He noted that 41% of respondents to a special questions section of the HMI indicated they had lost sales contracts with buyers who were unable to sell their current home.

“The uncertain economic climate and concerns about job security are discouraging many potential buyers from exploring a home purchase at this time,” said NAHB Chief Economist David Crowe.

“While buying conditions are very favorable in terms of prices, interest rates and selection,” Crowe said, “consumers are worried about what the future will bring, and builders are echoing those sentiments in their responses to the HMI survey.”

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales, sales expectations for the next six months and the traffic of prospective buyers.

Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Two out of three of the HMI’s component indexes posted marginal gains in August.

The component gauging current sales conditions climbed one point to 16 — its highest level since March — and the traffic of prospective buyers rose one point to 13, following two consecutive months at 12.

However, sales expectations for the next six months dropped two points to 19, partially offsetting revised numbers for last month showing a six-point gain.

Regionally, the HMI results were mixed in August.

The Northeast rose four points to 19, the West was up one point at 15, the South held even at 17 and the Midwest declined two points to 10.

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