NAHB/Wells Fargo Housing Market Index (HMI)

07/22/2024 angelica@builder.media

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.