by Calculated Risk on 6/15/2011 10:00:00 AM

The National Association of Home Builders (NAHB) reports the housing market index (HMI) declined to 13 in June from 16 in May. This is the lowest level since last September. Any number under 50 indicates that more builders view sales conditions as poor than good.

This graph compares the NAHB HMI (left scale) with single family housing starts (right scale). This includes the June release for the HMI and the April data for starts (May housing starts will be released tomorrow).

Both confidence and housing starts have been moving sideways at a very depressed level for several years.

Click on graph for larger image in new window.

Press release from the NAHB: Builder Confidence Declines Three Points in June

After holding at a low but steady level for the past six months, builder confidence in the market for newly built, single-family homes declined three points in June to a reading of 13 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The last time the index was this low was in September of 2010.
...
"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," agreed NAHB Chief Economist David Crowe. "Meanwhile, potential new-home buyers are being constrained by difficulty selling their existing homes, stringent lending requirements, and general uncertainty about the economy.”
...
Every component of the HMI fell in June. The component gauging current sales conditions and the component gauging traffic of prospective buyers each fell two points, to 13 and 12, respectively. The component gauging sales expectations in the next six months fell four points to tie its record low score of 15 set in February and March of 2009.

Builders are very depressed, and the HMI has been below 25 for forty-eight consecutive months - 4 years!