Homebuilder Blues: NAHB/Wells Fargo Home Builder Ratings May 2011

Today, the National Association of Home Builders (NAHB) released their latest Housing Market Index (HMI) showing a flat trend 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 notable declines 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.