A marker of home builder sentiment hit a record low in July with an unprecedented reading of 16, which represents a two-point drop from June, leaving economists wondering where the housing market’s bottom may be.

The NAHB/Wells-Fargo Housing Market Index, or HMI, tracks new-home sales, expected future sales, and customer traffic based on a monthly survey of 300 builders nationwide. This month’s reading even registered lower than the HMI’s historic low of 20, which was set in January 1991. (A reading of less than 50 is generally considered pessimistic.)

Perhaps even more meaningful than this month’s low score of 16, though, is the fact that July marks the eleventh month in a row that the HMI has stood at a reading of 20 or lower. The last time the HMI dropped as low as 20, in January 1991, it did so for only a month. By February 1991, it had bounced back to 27 and moved up to 40 by April 1991, beginning a sustained climb that did not peak until three years later, when the HMI reached a score of 71. That means the current lingering slump in builder confidence is exceptional in the index’s history.

More troubling signs came from the declines among the index’s components. The gauge of current sales activity decreased just one point from June to July, sagging from 17 to 16. But the more forward-looking components each declined by four points: expected future sales dropped from 27 to 23, while traffic of prospective buyers dropped from 16 to 12.

NAHB viewed the deepening gloom with alarm, calling for swift government action. Combined with bad financial news from last week—rumors that mortgage finance giants Fannie Mae and Freddie Mac may need a government bailout and news that IndyMac, one of the nation’s largest mortgage lenders, had been taken over by regulators—the increasingly cold housing market makes it “even more urgent for Congress to complete action on the housing bill now, a move that will help stabilize and restore confidence in housing and the U.S. economy,” said NAHB President Sandy Dunn.

David Seiders, NAHB’s chief economist, stressed the need for a first-time home buyer tax credit in the housing legislation currently before Congress. “Given the systematic deterioration of job markets, rising energy costs, and sinking home values aggravated by the rising tide of foreclosures, many prospective buyers have simply returned to the sidelines until conditions improve,” Seiders said. “An $8,000 tax credit, made available for a limited time, could be just the incentive needed to draw them into the game, and a policy-induced pickup in home sales could gain momentum further down the line.”

Ted Cushman is a contributing editor to BUILDER magazine.