Swan Dive, Take Two -- NAHB index plunges

Wow -- The National Association of Home Builders index plunged by 4 points in July. The 24 reading, down from 28 in June, was far worse than the 27 expected. It's also the third-lowest reading on record, and the worst since January 1991.

All three sub-indices fell. The present home sales index dropped to 24 from 29. The index measuring expectations for future sales fell to 34 from 39. And the index measuring buyer traffic slumped to 19 from 22.

It’s not like we needed any more evidence the housing market is in disarray. But that’s what we got today in the form of dismal builder confidence figures. The fact of the matter is, we have too much housing supply and not enough housing demand. New home builders will have to cut back on production more aggressively, and existing home sellers will have to get their prices right, in order for us to work off the large supply glut we’re presently saddled with.