(Greenwich, 9/19/2006) The confidence of U.S. home builders decreased for the eighth straight month in September, falling to the lowest level since February 1991 according to the National Association of Home Builders. The NAHB/Wells Fargo housing market index dropped by three points in September to 30 from 33 in August, showing that most builders think the housing market is poor. A year ago, the index was at 65. (A reading of 50 indicates that builder sentiment was balanced between good and poor.)
By index measures, builders in all four regions of the country are pessimistic about the market. Sentiment fell by six points in the Northeast to 28. It fell by five points in the West to 38 and by three points to 38 in the South. The sentiment index held steady at 16 in the Midwest.
These charts are starting to look a lot like 1991-92 again, only this time it is all happening a lot faster thanks to the Internet and bloggers. I do not think this is going to torpedo growth, but it will make the Fed a lot more cooperative. Intereset rate increases are behind us now.