Here are some economic data that came out today with barely a yawn from Wall Street (no surprise, it’s almost Christmas!). The chart below shows the National Association of Home Builders’ (NAHB) confidence index, which measures home builders’ confidence in the housing market:

I don’t know about you, but that decline doesn’t look over to me. After the number came out today, I turned my head to the tv only to watch people insist that the housing market has hit the bottom. “Time to get in and buy before you’ve missed your opportunity!”, says one realtor. I wonder what *his* motives are…it sounds to me like the stockbrokers who were trying to sell the Nasdaq in late 2000.

But let’s look at the timing of this index relative to the last national decline in housing prices in the early 1990s. The home builders’ index hit it’s low of 24 in the 4th Quarter of 1990. But the chart below shows that the biggest declines in housing prices during that real estate cycle were between 1990 and 1993!

The NAHB index is anything but a sign that housing is through cooling. If anything, it’s a sign that more price declines are on the horizon. Look for housing prices to continue to drop for the next 2-3 years. It will most likely be a slow but continuous trend.

And then get ready for one of the best real estate buying opportunities since the early 1990s.