(KNSI) – Housing data continues to underperform expectations.
On Monday, the National Association of Home Builders released its housing market index for August. HMI showed the eighth straight decline not seen since 2007.
A number below 50 represents a deterioration in the real estate market. The index fell from 84 in December to 49 this month. HMIs are grouped by region. The Midwest has the lowest at 42, tying it with the West. The South is the highest, expanding at 54.
Current sales are still going strong, but there are concerns about traffic driving future home purchases. There are 32 interested buyers. For comparison, it reached 6 in the worst months of the late 2000s financial crisis and subsequent real estate crash.
Homebuilders are pulling back as affordability concerns spurred by rising interest rates drain traffic and make future sales more uncertain. Housing starts, announced Tuesday morning, were well below expectations, down 9.6% from last month.
Redfin declared last week that real estate has moved into a buyer’s market. Nationwide, the number of homes he’s listed for at least one month has increased by 12.5%. In Minneapolis, the increase in “outdated” listings was much more pronounced, jumping 32%.
Nationwide, there is now a supply of new homes over nine months old, about twice the average. Potential buyers are increasingly betting on price cuts in the coming months to settle the current imbalance.
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