In more than a year, U.S. home builders are seeing the lowest confidence level. A lot of factors have contributed to this, starting with the expiration of the government tax credit.

When the federal government launched a home buyer tax credit, which allowed home buyers a maximum tax credit of $8,000, the housing industry was able to breathe a sigh of relief. But the relief was but temporary – with the expiration in April, home sales went down again. Though there was no change in the August to September confidence index of the National Association of Home Builders/Wells Fargo – which is pegged at 13 – this only matches the reading in August, which is the lowest since March of 2009.

A forecast made by 50 economists say the gauge may rise to 14 though not everyone is optimistic.

“It’s hard to see where the impetus for growth for housing is going to come from. The employment situation keeps people very much on the back foot and remaining in their existing homes,” says New York Standard Chartered Bank’s David Semmens.

Indeed, the unemployment rate is still hovering at around 10%. Couple this with the mounting foreclosure and home sales are bound for a slow improvement. Even with the record-low mortgage rates, builders are unable to take advantage because of the low number of homes being sold.

An index reading of below 50 means more people believe the conditions are poor. Bloomberg estimates a 12 to 15 reading, a few leaps from the record low of 7 in January 2009. The September indexes provided by builders groups in single-family home sales and the sales expectancy in the next six months were unchanged from August at 13 and 18 respectively. Even buyer traffic gauge is at its lowest: 9, one lower than previous low of 10 in March 2009.

Different regions are getting different indexes. Both Midwest and Northeast saw a decline in confidence gauge – from 15 to 12 in the Midwest and 18 to 16 for the Northeast. Though the West remains unchanged at 8, the South has seen an improvement of 12 to 14.

Pace of housing starts increased from 546,000 to 550,000 homes in August. The record-low in housing starts is at 477,000 from a three-decade high 2.27 million in January 2006.

Competing with an increasing number of foreclosed homes – that keeps houses in the market for longer and prices at a low – builders and sellers also see a decrease in net orders. Even the largest home builder I New Jersey, Hovanian, saw a 37% decline in the quarter compared to last year’s.