Home builder confidence drops as housing market sags after tax credit

"That said, we do believe that favorable factors such as low mortgage rates, affordable prices, and demographic trends will help revive consumer demand for new homes this year." 

Crowe expects that new home sales will increase 10 percent from 2009 to 2010. 

With the expiration of up to an $8,000 tax credit at the end of April, builders were reporting hesitant homebuyers because of continued uncertainty about the economy and job markets combined with tighter consumer credit. 

"We continue to see a lull in home buying activity following the expiration of the federal home buyer tax credit program, as many of the sales that would have occurred this summer were likely pulled forward to meet that program's deadline," said NAHB Chairman Bob Jones, a home builder from Bloomfield Hills, Mich., in a statement.