Nahb index One of my favourite indicators has declining for 11 consecutive months and currently at 33. Single family sales for the next 6 months is currently at 31 while present day single family sales is currently at 39. This tells me that sales are expected to be lower over the next 6 months. Any reading below 50 can be viewed as a housing recession. As of October this year, the Nahb has dipped below 50 which is a negative sign for the housing market. This is strongly correlated with expected job losses when the indicator drops below 50.
As an fyi, the last time the reading was this low was in June of 2012. According to statista.com, there were 5.621 million jobs in construction in June of 2012 compared to 7.719 million jobs as of Sept 2022. The Nahb is highly correlated to US unemployment rates which lags by about 12 months. This leads me to believe that 2023 could be the year we see well over a million of job losses just in the construction industry alone. If housing permits and housing starts continue to decline as the Nahb index seems to suggest, we could expect at least 2 million job losses as we've seen in the past during the GFC.
PS: There are no "crystal balls" in my analysis.
https://www.nahb.org/-/media/NAHB/news-and-economics/docs/housing-economics/hmi/202212/t1-nahb-wells-fargo-national-and-regional-hmi-202212.xls
https://www.statista.com/statistics/187412/number-of-employees-in-us-construction/