How bad is the housing crisis? There is no positive news from home builders. The NAHB index reports this month the lowest survey values since the index was introduced in 1985. The NAHB/Wells Fargo index is made up of three survey components, current conditions, expected conditions over the next six months, and traffic conditions. All have hit the lows since the inception of the survey. The index is set between 1 and 100 so there is a lower bound in how low it can go. A number above 50 means that there is the belief that conditions are good.
The survey has fallen off of cliff, but has been declining for some time. The peak survey results was in June 2005 at just over 72 and is now just over 18. What is most damning about the current survey is the increase in poor prospects for the future. The current conditions have been bad, but even at the beginning of the year home builders were mixed about the future. The latest survey shows that they have thrown in the towel.
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