New home market sees another no-show start to the buying season

The new home market won't pick back up until the existing inventory clears out

This chart shows the housing market index from 1991 to the present. The market has improved since January 2009, but it still remains near record lows.

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing a slight decline for most measures with the "buyer traffic" index remaining near record lows as home builders continue to plod through the weakest activity seen in generations.

It's important to recognize that currently all measures are showing either notable year-over-year declines or, for the buyer traffic index, zero change in the level of activity seen since last year.

Clearly the new home market has seen another no-show start to the buying season with the typically strongest selling months (remember Bob Toll's analysis of the seasons) fully behind it.

The new home market will likely not resume any significant form of healthy function until the considerable overhang of inventory is cleared.

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