NAHB Housing Market Index

What is NAHB Housing Market Index?

The NAHB/Wells Fargo Housing Market Index (HMI) is a monthly survey of home builders conducted by the National Association of Home Builders. It measures builder confidence in the market for newly built single-family homes on a scale of 0–100. Readings above 50 indicate more builders view conditions as good than poor. The index has three components: current sales conditions, expected sales over the next six months, and prospective buyer traffic.

Why does it matter for investors?

Builder confidence is a leading indicator of future housing construction activity. When builders are optimistic, they break ground on more homes — which feeds into Housing Starts and GDP data weeks later. The index is sensitive to mortgage rates: sharp rate increases quickly dampen builder sentiment, while rate cuts can revive it. A sustained HMI below 50 signals a housing market contraction that can weigh on consumer wealth and construction employment.

What to watch for

• ›Headline index vs. 50 threshold and consensus estimate
• ›Prospective buyer traffic sub-index — earliest signal of demand shifts
• ›Regional breakdown: South (largest market) and West tend to be most rate-sensitive
• ›Trend vs. prior 3 months: is confidence recovering or deteriorating?
• ›Correlation with 30-year mortgage rates — HMI inversely tracks rate moves closely