NAHB Sinks to 16 Year Low of 28

The National Association of Homebuilders confidence index shrank to 28 (consensus 30), a new low for this housing decline. The last time the confidence level was this low was in February 1991. Homebuilders continue to lose money as they have had to continue discounting new homes, in order to entice buyers. The fall-out from the subprime market caused further credit tightening just as 30-yr mortgage rates have risen 60 bps in a little over a month. Inventories are still too large for the current sales pace. All survey categories saw declines including prospective buyer traffic and expectations for sales six months from now. The only region to show improvement in confidence was the Northeast.