NAHB/Wells Fargo Housing Market Index (HMI)
The NAHB/Wells Fargo Housing Market Index (HMI) aims to assess and monitor the current state of the single-family housing market. This index relies on a monthly survey of single-family builders, who are queried about their evaluations of three key aspects of the housing market:
According to the NAHB, builder confidence in the market for new single-family homes fell to 42 in July, down one point from the previous month. Higher-for-longer mortgage interest rates, as well as elevated rates for construction and development loans, continue to put a damper on builder sentiment.
All three HMI components in July remain below the key threshold of 50:
- Present sales conditions fell one point to 47.
- Expected sales in the next six months increased one point to 48.
- Traffic of prospective buyers declined one point to 27.
The July survey also revealed that builders are increasingly cutting prices to bolster home sales (31% of builders did so in July compared to 29% in June and 25% in May). However, the average price reduction in July held steady at 6% for the 13th straight month.
