Traffic of Prospective Buyers from the National Association of Home Builders (NAHB) collapsed in May as many potential buyers have been priced out of home ownership by surging prices and mortgage rates. Traffic fell by -9 points last month, its second-largest loss on record and the fourth decline in the last five months. Most importantly, Traffic broke under last year’s low, generating a major warning flag for the housing market. A drop of this magnitude from a cyclical high in homebuyer traffic has almost always been associated with a slowing housing market and recession, which means that the peak in the housing market is likely on the horizon.
For more about the risks posed by deteriorating housing affordability, see our recent special report, “The Impending Housing Crisis: A Real Life Look at Affordability.”
