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The National Association of Home Builders (NAHB) just released its monthly Housing Market Index for June and the results were again dismal. The index, which is based on a general survey of about400 home builders, fell from 19 in May to 18 in June. That ties a record low, which was last reached in December 2007.

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The NAHB's index is a diffusion index scaled to a range of 0 to 100. Readings below 50.0 indicate that the majority of respondents said that conditions worsened during the survey month.

The NAHB's index on single-family home sales was unchanged at 17, and the outlook on sales of single-family homes was 28, also unchanged. The index on prospective-buyer traffic was 17 in June, down 1 point from May. The record low was 13 last December.

Recent data on mortgage applications also indicate very little change in conditions. With consumer confidence at a 28-year low and tight credit conditions in place, none of this should surprise. What matters now is the reconciliation between housing construction and the need for housing. Now that builders have brought construction below the level of household formation, inventory levels can fall even if sales are weak since builders won't be building enough to meet population growth.

Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic,

The Money Market

, first published in 1978 by Marcia Stigum, and

The Strategic Bond Investor

. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback;

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