- Prior was 37
- Current single-family home sales 41 vs 41 prior
- Prospective buyers 22 vs 23 prior
- Home sales expectations over the next six months 46 vs 49 prior
It’s curious that home builder stocks hit a record on Friday via the XHB ETF. The market is looking way ahead towards a lowering of interest rates and some demographic tailwinds. Either that, or the market is way off base and making a huge mistake. The long end of the bond market has been bid and 30-year yields are down to 4.68% but the days of the 2% mortgage are not coming back and I’m not sure I’ve heard a coherent plan from the White House or Congress on how to spur new home affordability and construction.
The NAHB/Wells Fargo Housing Market Index is a monthly survey that measures how confident U.S. homebuilders feel about the single-family housing market. Conducted among members of the National Association of Home Builders, the index runs from 0 to 100, where any reading above 50 means most builders consider market conditions favorable.
The HMI is built from three weighted components. Current sales conditions carry the most weight at 59%, reflecting how builders assess present-day sales activity. Prospective buyer traffic accounts for 27%, capturing foot traffic at model homes and sales offices. Future sales expectations make up the remaining 14%, measuring builders’ six-month outlook.
The index has been stuck well below that neutral 50 threshold — hovering near pandemic-era lows — because builders are being squeezed from both sides. On the demand side, elevated mortgage rates and home prices have eroded buyer affordability, pushing builders to offer expensive concessions like rate buydowns and price cuts just to keep sales moving
