Tuesday, November 18, 2008

NAHB Market Index Hits Record Low

by Bill McBride on 11/18/2008 01:03:00 PM

From MarketWatch:Home builders' index falls to record-low 9 in November

U.S. home builders have never been as anguished about their industry as they were in early November, with their monthly market index gauge plunging five points to a record low 9, the National Association of Home Builders reported Tuesday. "We are in a crisis," said Sandy Dunn, chairman of the NAHB.
Residential NAHB Housing Market Index This graph shows the builder confidence index from the National Association of Home Builders (NAHB).

The builder confidence index was at a record low in November.

Usually housing bottoms look like a "V"; this one will probably look more like an "L". (this refers to activity like starts and sales, but will probably also be apparent in the confidence survey).

Press release from the NAHB: Builder Confidence Plummets; Congress Needs To Act
Builder confidence in the market for newly built single-family homes plunged in November as worsening problems in the financial markets, job market weakness and overwhelming uncertainty about the economy continued to negatively impact consumer behavior, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI sank five points to 9, the lowest level recorded since the series was created in January of 1985.

“Today’s report shows that we are in a crisis situation. If there’s any hope of turning this economy around, Congress and the Administration need to focus on stabilizing housing,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va.. “Tremendous economic uncertainties have driven consumers from the housing market, and it’s going to take some major incentives to bring them back. Beyond the work that is being done to help reduce foreclosures, Congress must immediately incorporate such incentives for qualified buyers in a new economic recovery package.”

“The housing downturn has already cost America three million jobs in construction and related industries, and this downward momentum cannot be stemmed without substantive government intervention,” agreed NAHB’s new Chief Economist, David Crowe.