Home builders' index dives after tax break expires

The word on the street is U.S. homebuyers are becoming more and more pessimistic about the recovery in home building. As marketWatch.com indicates, the housing market index dived to 17 in June from 22 in May. The index was lower than the 21 that was expected by economists surveyed by MarketWatch, and was the lowest since it hit 15 in March. The five-point drop was the most since November 2008.

A setback was inevitable and expected in the two months or so following the expiration of the homebuyer tax credit. However, Marketwatch.com reported the dramatic decrease in consumer activity and the job market may have more to do with the drop in index. "It all comes down to the job market," wrote Jennifer Lee, a senior economist for BMO Capital. "The housing market and the economy need the steady creation of jobs."

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