- Prior was 39
- Current single-family home sales 41 vs 42 prior
- Prospective buyers 23 vs 26 prior
- Home sales expectations over the next six months 49 vs 52 prior
In the past month, US 30-year yields have ticked 5-7 basis points higher but there have been signs of buyers wading in via the latest existing home sales report.
The latest survey also revealed that 40% of builders reported
cutting prices in December, marking the second consecutive month the
share has been at 40% or higher since May 2020. It was 41% in November.
Meanwhile, the average price reduction was 5% in December, down from the
6% rate in November. The use of sales incentives was 67% in December,
the highest percentage in the post-Covid period.
The NAHB/Wells Fargo Housing Market Index (HMI) is a monthly economic indicator that gauges builder confidence in the U.S. single-family housing market. Based on a survey of National Association of Home Builders members, it operates on a scale of 0 to 100. A reading above 50 indicates that more builders view conditions as “good” rather than “poor.”
The index is a weighted average of three specific components:
- Current Sales Conditions (59%): Builders rate current sales volume.
- Future Sales Expectations (14%): Outlook for sales over the next six months.
- Prospective Buyer Traffic (27%): The volume of potential buyers visiting model homes.
Currently, the index is low because builders are caught in a “dual squeeze.” On the demand side, high mortgage rates and prices have hurt affordability, forcing builders to offer costly incentives
