Homebuilder confidence fell under 50 for the first time since May 2020, according to the National Association of Homebuilders Housing Market Index…(NAHB)
- M-O-M: The housing index fell 6 points to 49 in August, this is the 8th straight month the index has fallen.
- Y-O-Y: The index is now down 26 points when compared to the same time one year ago.
SWING & A MISS: Economists had projected the index would hold steady at 55.
Regionally, the South is the only region above the breakeven level after a 6-point drop to 54 in August. The Northeast fell 8 points to 49 and the Midwest and the West are tied for last at 42. The Midwest and the West fell 7 points and 5 points, respectively.
- REMINDER: A reading of 50 indicates that more builders view conditions as good than poor.
Current sales conditions was the only component of the index above the breakeven level at 57 after a seven-point drop month-over-month. Six-month expectations fell two points to 47 and the traffic of prospective buyers is now at 32, this is almost half of where it was just four months ago (61).
The Fed wanted housing to slow down and it looks like they got their wish. In fact, NAHB Chief Economist Robert Dietz said that we are now in a housing recession. “Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession…The total volume of single-family starts will post a decline in 2022, the first such decrease since 2011.”