In the wake of a sluggish spring selling season, home builders’ depression about the market deepened in June, as few said they expect anything better than somnolent summer sales.

Builder confidence in current and future single-family home sales levels and traffic fell three points in June, to 13 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), slipping back to its September 2010 level. The highest builder confidence number in the last year was 17 in March. It takes a number over 50 to indicate that more builders view sales conditions as good rather than poor.

“Builders are being squeezed by the continuing weakness in existing-home prices—against which they must compete—as well as rising material costs,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “Rising costs for materials such as roofing, copper, wallboard, vinyl siding and other components have made it extremely difficult to construct a new home and sell it at a price that covers the costs.”

NAHB Chief Economist David Crowe’s assessment of the results was similar. “Builder confidence has waned even further as economic growth has stalled, foreclosures have continued to hit the market, and the cost of building a home has risen,” he said. “Meanwhile, potential new home buyers are being constrained by difficulty selling their existing homes, stringent lending requirements, and general uncertainty about the economy. Economic growth must pick up in order for housing to gain the momentum it needs to get back on track.”

Every component of the HMI fell in June. Builders’ assessment of current sales conditions and prospective buyer traffic fell two points to 13 and 12 respectively. Builder optimism about future sells fell even further, by four points to 15, tying its record low score set in February and March of 2009.

Home builders in the Northeast were the only ones who were more optimistic in June than they were in May. Their score for the index was up two points to 17. Midwestern builders’ score dropped three points to 11. Southern builders’ score dropped two points to 14. And builders out west posted a four point decline to 12.

 Teresa Burney is a senior editor for Builder magazine.

Learn more about markets featured in this article: Reno, NV.