The historic low of the 22-year index is 18, which was reached in December 2007.

"Despite the Federal Reserve's concerted efforts to lower short-term interest rates, free up credit markets and shore up the national economy, the housing market has shown no evidence of improvement thus far. In fact, conditions have continued to deteriorate in recent times," said NAHB Chief Economist David Seiders.

"This certainly adds fuel to the argument that targeted policy stimulus, in the form of a temporary tax credit for home buyers, is essential to halt the housing downswing and remove the heavy drag being exerted by housing on overall economic growth," he added.

Three components make up the index. The present housing index for single-family homes was 17 compared to the previous month's reading of 18. The sales expectations index fell to 27 compared to April's score of 30 and the traffic of prospective buyers component fell two points to 17.

"With the HMI hovering in the historically low two-point range that's prevailed over the past nine months, the message is very clear: The single-family housing market is still deteriorating and Congress and the Administration must move immediately to enact legislation that will help reverse the trend," said NAHB President Sandy Dunn.

Dunn called for a temporary home-buyer tax credit to help prospective home buyers help kick-start a housing and economic recovery.

In the last 12 months, the index has dropped a total of 14 points.

By Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it