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First Cut: NAHB Housing Market Index collapses to lowest in nearly 8 years

The NAHB/Wells Fargo Housing Market Index collapsed to 30 in April after 72 in March. It was the lowest reading since 29 in June 2012 when the housing market was struggling to emerge from recession along with the rest of the economy.

The component for present sales fell to 36 in April after 79 in March and expected sales were 36 after 75. However, it is the subindex for buyer traffic that tells the tale with its drop to 13 after 56. This is the lowest since 11 in September 2011 and an exception one-month deceleration. Consumers had other things on their minds with the measures to contain the spread of COVID-19, especially concerns about job security. There may be some potential homeowners who will consider buying right now while mortgage rates are unusually low and there is the potential for getting a better price. These are going to be few and far between. If supplies of existing units rise, some buyers who might have considered new construction will be lost. Homebuilders are going to respond by not starting some projects until the crisis is over, and possibly downscaling some already underway.

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