According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, the Conference Board’s Leading Economic Index (LEI) decreased 0.3% in August, falling for the sixth straight month. Over the past six months, the LEI declined 2.7%, suggesting weaker growth over the coming months and a higher risk of recession.
Homebuilders were negative in their assessments of the housing market for the second consecutive month, with the Housing Market Index declining from 49 in August to 46 in September – the lowest value since May 2020. Readings below 50 are consistent with more builders being negative than positive in their views of the housing market.
Residential activity has weakened dramatically YTD, with higher mortgage rates and affordability being the biggest concerns. With mortgage rates exceeding 6% for the first time since November 2008, NAHB’s Chief Economist said that the “housing recession” shows “no sign of abating,” and builders are using incentives to try to stimulate demand.