NAHB Index Drops To 3 Month Low, Misses Expectations, Creeps Along Generational Bottom

Tyler Durden's picture

No surprise in the only economic indicator of the day: The September National Association of Home Builders/Wells Fargo Housing Market Index declined from 15 to 14, missing expectations of an unchanged print, and at a 3 month low, although as the chart below shows, it is really just humming along the generational bottom with no threat of increasing any time in the near future. As the report demonstrates, sentiment was worse in 3 out of 4 regions, in Northeast at 15 vs August’s 17, in the West at 12 vs 15, and in the South at 15 vs 17; in Midwest 11 vs 10. That said, we are confident this will surge shortly, as soon as the President announces details of his plan to tax millionaires, which assuming we have hyperinflation shortly (remember: that debt won't inflate itself) means pretty much everyone.

From the report:

Builder confidence in the market for newly built, single-family homes dipped by a single point to 14 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for September, released today. The index has now held between 13 and 16 for six consecutive months.

"Very little has changed in terms of housing market conditions so far this year," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada. "Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes, and competing against foreclosed properties that they have seen for some time. Beyond this, both builder and consumer confidence took a hit in recent weeks with the market disruptions caused by the S&P downgrade and congressional gridlock on the budget deficit."

"The fact that the HMI continues to hover within such a narrow, low range reflects builders' awareness that many consumers are simply unwilling or unable to move forward with a home purchase in today's uncertain economic climate," added NAHB Chief Economist David Crowe. "While some bright spots are beginning to emerge in about a dozen select metro areas, the broader picture remains fairly bleak due to the weak economy and job market."

Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Each of the HMI's three component indexes recorded declines in September. The component gauging current sales conditions slipped one point to 14, while the components gauging sales expectations in the next six months and traffic of prospective buyers each declined two points, to 17 and 11, respectively.

The Midwest was the only region to post a gain in its HMI score for September, edging up one point to 11. Meanwhile, the Northeast and South each posted two-point declines to 15 and the West posted a three-point decline to 12.

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Henry Chinaski's picture

Bouncing along the bottom.  For now.

DirtMerchant's picture

until we're dragged over the mariana trench!

33% increase in default letters last month, thousands of "undeclared" foreclosures because banks are still playing balance sheet skittle games, this is going to get a whole lot worse before it gets better!

RobotTrader's picture

Lennar is celebrating this news with a 5% gain in the first hour of trading.


HD and LOW also barely down for the day.

Caviar Emptor's picture

It's gettin old, Robo. Pull up the 5 year charts on any homebuilders and take a look at what grim death looks like

Templeton's picture

So, it seems that Robo gets a lot of flack whenever he posts.  People get upset that he's cheerleading for some great bull market.  Yet, most (if not every) post I've seen of his, he decries the fact that our markets are broken (stocks rallying on bad news, nonsensical data leading to impractical market swings).  What gives? 

Smiddywesson's picture

Gosh Robo, thanks for the good news

I feel much better now

Ancona's picture be homeless with the hint of fall in the air.

Cognitive Dissonance's picture

20 minutes to show time boys and girls. Hurry up or you'll miss out on the great Obama speech.

sodbuster's picture

There will be kool-aid for the truly stupid.

Cognitive Dissonance's picture

Punch and Judy. Oh what a glorious day boys and girls, what a glorious day.

Punch and Judy

DirtMerchant's picture

Watching Obama speak is like a drinking game now, every time he says "pass this bill" and the dow drops 20pts, I'll drink a shot!


Cognitive Dissonance's picture

It's never too late to get drunk on Obama. :)

Snidley Whipsnae's picture

I've never watched an Obama speech since seeing one when O was on the campaign trail...

When I heard 'change you can believe in' with few details of what would change I knew we were in for more Jr Bush destruction of the Constitution...

So, to me whatever O says is coming from behind the scenes... O is a mouthpiece...

O can only redistribute taxes, go along with printing mountains of new debt and declare a few more conflicts in places that most Americans can't find on a globe.

Whats to watch? This is a rerun.

trav7777's picture

well, Gold fell off a fucking cliff and the FX crosses on AUD and BRL are batshit today.

Of course Bama's solution is more taxes.  Lord knows we can't retreat to the dark ages of FY2000 spending when all the grammas were in the streets eating rats and the children were in the coal mines

scatterbrains's picture

when do we start seeing the  0 down, 0% interest rates, no payments for 24 months on  60% off fanny/freddy properties? Someone wake me up when we get there.


DirtMerchant's picture

I'll be buying some rentals when that happens!

Caviar Emptor's picture

And they'll still wind up delinquent as soon as we get  the next leg down in employment and the economy! THen we'll get another wave of bailouts

Smiddywesson's picture

When all those empty houses are empty long enough to be stripped of copper and sport the equivalent of "harvest" or "avacado" cabinets, then you will see some deals, on what nobody wants.

kito's picture

gold getting obliterated again. tyler, please stop headlining gold's rise!!!!!!!!!!!!!!!!!

fuu's picture

$1785 is obliterated?

DirtMerchant's picture

I think he meant to say "buying opportunity"

ww2vet's picture

tyler just another zh asshole-long and longer gold down to 1500 & below

Snidley Whipsnae's picture

Kito and ww2vet... 2 trolls that appeared on an earlier thread calling attention to central banks/bullion banks renewed attacks on gold.

Funny, they didn't mention that the equities mkts fell off a cliff from the open...DJ down 231 now... and we know that the PPT is at work... How much would the DJ be off if the PPT were not on the job?

Benny...Oh Benny... Better clean up this mess before your 2 day meeting!

trav7777's picture

gold up in AUD, EUR, and especially BRL...FX moves are wtf today

kito's picture

snidley, the world issues, the same ones that have led to gold's rise, have only intensified. so maybe you can explain why gold has been held down? how do you equate my belief that central banks are pumping fiat and dumping gold to one of a troll??? 

achmachat's picture

to me it looks like people are getting out of paper gold and paper silver.

as they re-invest in physical, spot will rise again accordingly.

Smiddywesson's picture

After gold dropped on the Swiss currency intervention, and they telegraphed how bad this week was going to be by ramping the markets on full retard last week, how can anyone be surprised they would go after gold?  You knew it was coming people.  Keep taking money off the table and stacking physical. 

Man, the snap back in gold prices is going to be tremendous.  Will it be Wed on Uncle Ben's dog and pony show?  Maybe Friday? 

Dick Darlington's picture

Chairsatan Bearnaise will buy all the houses and O'bummer will tear them down and announce generational building project to "stimulate" the eCONomy. Timmah will issue trillions more uncle gorilla notes to finance O'bummers new pet project and Bearnaise will buy them all with freshly printed benjamins.

the not so mighty maximiza's picture

After 2 summers of recovery this is all we get?

Caviar Emptor's picture

Let me spin that 'properly' for you: those were 2 summers of "quality over quantity"! People focused on improvements, no on bigger McMansions! Soon enough, with all the cash on the sidelines and hungry investors snapping things up off the shelves, the next baba--boooom will be underway! 

monopoly's picture

I don't think a drop of 24 dollars is or 1.5% is my definition of obliterated. Still well within the range of consolidation. But will admit this is one ugly market. Miners hanging far. Lets face it guys. The housing market is gone, kaput. Maybe a bottom in the next year or so, then it will languish for years while the excess supply gets worked out. Forget the housing market, you need a cave, period.

Smiddywesson's picture

Ten thousand boomers retiring every day and no job, the housing market is dead for at least a decade.

I'm sure the squatters and copper thieves will take care of those empty homes.

The entire country is about to be Detroitified.

Caviar Emptor's picture

The boom is just around the corner! Step right up and give me your money in return for the investment of a lifetime. 

PaperBear's picture

And the sellers of paper gold/silver are out in force again today - $1,781/oz and $39.11/oz. This is getting so frigging old.

the not so mighty maximiza's picture

o nooo,  too late i read it...hahahahahahahh

RobotTrader's picture

Poor Eric King will have to start his interviews this week..

"With gold crashing back below $1,800, get the latest King World News blogs featuring........"

fuu's picture

He will almost be reduced to your sad state.

Snidley Whipsnae's picture

Perhaps King will discuss sell off of equities? DJ off 231...

buzzsaw99's picture

"Builders continue to confront the same challenges in accessing construction credit, obtaining accurate appraisal values for new homes...


The appraisals are accurate, builders don't like the truth is the problem.

DirtMerchant's picture

The problem now is that the appraisals are coming in at under the cost of materials and labor to build the house...impossible to get financing without giving away all of the profits and then some.

Snidley Whipsnae's picture


Who would build a new home with the market flooded with perfectly good (according to American standards) homes?

Smiddywesson's picture

This is a perfect example why nobody should look at new home starts as a leading indicator of economic conditions.  Builders build for the same reason golden labs dig, it is their nature.  If you don't build you go bankrupt.  If you build and the economy doesn't improve, you go bankrupt.  Either way, they build.

AdahPrice's picture

So many McMansions, so few jobs.  Perhaps we will see some new trend, in which 2 or 3 GenXer couples get together and buy a house, in what we might call "a hippie commune".  And then, if the GenXers could convince the nice Central Banker Men to tear down the house next door, they could plant a nice healthy communal garden, and save the planet.  And then, if they could convince the nice Congress Men to end the War on Drugs, they could add some nice medicinal cannabis to the garden.  AND THEN we might see, from seemingly out of nowhere, the NEXT GREAT MIRACLE of technological, musical, and artistic revolution, as Earth is transformed from the wasteland the nice Alpha Dominant Men have made it, into a planet even the Creator would enjoy visiting frequently.

Dapper Dan's picture

The owners of the R.V. park down the road installed a bus stop 2 years ago, for the many children who now reside there.

How long will it take for families now living in a 25 foot RV to go an purchase a new home?

My theory is most people who have drastically down sized their living space will not want or need the 2000 to 3000 sq foot home at any time in the future.

A drive around many American neighborhoods confirms it: Today’s homes are big. No, not big -- huge. The average American home swelled from 983 square feet in 1950 to 2,349 square feet in 2004 -- a 140% increase in size.

And no builder to my knowledge is building homes in the 1100 to 1700 sq foot range.

I see opportunity here.

Disclosure: Dappers home = 1250 SF + wife, 2 kids.

quality of life: preternatural

The preternatural or praeternatural is that which appears outside or beyond natural. In contrast to the supernatural, preternatural phenomena are presumed to have rational explanations that are, as of yet, unknown. @ WiKi

As of yet!!

monopoly's picture

Gold at 1,780 down less than 2% and you call that "crashing". I just cannot believe you. And this is the way gold, silver trade guys. Very frustrating at times and easy to give up and just keep confetti. But it has proven itself time and time again, to the upside. Considering the strong but soon to be worthless dollar, not too bad.

Or, do you want to follow Timmaayyys advice?

Rockfish's picture

Creamers pick "yea yea I,I'd be a buyer of home builders right now.