Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing a decline to the overall index as well as at best a flattening to most component indices.
It’s important to recognize that although the series are seasonally adjusted, each series has generally shown notable strength or noticeable flattening during the first quarter of each of the last 4 years.
Now that the early season optimism has likely run its course, look for these indices to turn southward again as builders more clearly contemplate the horrendous condition of their market.
The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared and with unemployment on the rise and the level of completion still unusually high, it appears that the overhang is here to stay.
Each component of the NAHB housing market index remains WELL BELOW the worst levels ever seen in the over 20 years and continues to remain firmly in uncharted territory.