For builders, October, 2008 may have been the worst month ever, except perhaps for November. That sentiment was borne out in the National Association of Home Builders'/Wells Fargo Housing Market Index (HMI), released early Tuesday afternoon, which fell to an all-time record low of 9 from another record low of 14 in October.
The index, created in January of 1985, gauges builder confidence in the market for newly built single-family homes. A reading of 50 indicates as many view sales conditions in the market positively as view it negatively.
"Today's report shows that we are in a crisis situation," said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va.. "If there¹s any hope of turning this economy around, Congress and the Administration need to focus on stabilizing housing."
"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," said NAHB¹s chief economist, David Crowe, who succeeded David Seiders this month. "Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers."
Two of the three HMI component indices declined in November. The index gauging current sales conditions fell six points to 8, a new record low. The index gauging traffic of prospective buyers fell four points to 7, another record low. The index gauging sales expectations in the next six months held firm from the previous month at its record low of 19.
Every region posted declines in builder confidence in November. The Northeast, South and West each registered five-point declines to 11, 11 and 6, respectively, while the Midwest registered a six-point decline to 7.