NAHB index falls ... again
* The overall index dropped to 28 from 30 in May. That was worse than the 30 reading forecast by economists ... down sharply from 42 a year ago ... a fresh cycle low ... and the worst reading since February 1991.
* All three components of the index fell. The index measuring current single-family home sales dropped to 29 from 31 ... the index measuring future single-family home sales dropped to 39 from 41 ... and the index measuring prospective buyers traffic slipped to 21 from 22.
* Regionally, buyer traffic was up in the Northeast, but down everywhere else (Midwest, South, West)
The housing industry faces multiple problems -- Tighter mortgage lending standards, excess for-sale inventories, the absence of speculative buyers, and relatively weak sales from "core" customers. To top it all off, mortgage rates are climbing again. Thirty-year fixed mortgages are going for 6.61% now, according to the latest data from the Mortgage Bankers Association. That's the highest since last July.
These latest numbers confirm that all the talk of a housing market bottom is just that -- talk. My view remains the same: A longer-lasting rebound won't come until at least 2008, likely in the back half of the year, because supply and demand are way out of balance. Finding equilibrium will take time.