The NAHB/Wells Fargo housing market index for April is up 1 point to 45 and at its highest level since 46 in September 2022 when home mortgage rates were rising toward 7 percent. The index is up for the fourth month in a row. The April reading matches the consensus in an Econoday survey. Homebuilder optimism is being supported by recent declines in mortgage rates and by a lack of inventory in existing home sales. NAHB Chief Economist Robert Dietz noted about one-third of housing inventory is now new construction compared to the historical norm of about 10 percent.

The index for present sales of new single-family homes is up 2 points to 51 in April, its highest level since 54 in September 2022. The index for expected single-family home sales is up 3 points to 50 in April, its highest since 61 in June 2022. The index for buyer traffic is unchanged at 31 in April from March.

The Freddie Mac 30-year fixed rate for a mortgage averages 6.28 percent for April to-date, its lowest since 6.11 percent in September. The report indicated that builders face ongoing supply issues for materials and that credit remains tight, although not much worse for the regional bank system after the disruptions in the sector in March.

Fewer builders are making price concessions, while sales incentives are on the rise. The report said that 30 percent of builders reduced prices in April compared to 31 percent in March and February. The average price reduction is 6 percent in April, March, and February. Builders using sales incentives is up to 59 percent in April after 58 percent in March and 57 percent in February.

The housing market index has been rebounding following severe declines throughout 2022. April's consensus of 45 would add 1 point to March's 7 point to 44.

The housing market index is a monthly composite that tracks home builder assessments of present and future sales as well as buyer traffic. The index is a weighted average of separate diffusion indexes: present sales of new homes, sales of new homes expected in the next six months, and traffic of prospective buyers of new homes.

This report provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as the housing market index, investors can gain specific investment ideas as well as broad guidance for managing a portfolio. Whether the housing market index reflects new home sales or home resales, once a home is sold, it generates revenues for the realtor and the builder. It brings a myriad of consumption opportunities for the buyer. Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home sales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.