The NAHB/Wells Fargo housing market index is up 3 points to 46 in November and above the consensus of 43 in the Econoday survey of forecasters. The NAHB said that the rise was a response to the results of the election, with homebuilders now anticipating easing in regulations for the industry. However, the relief is tempered by other challenges. Homebuilders still face shortages of skilled labor and suitable building lots, and prices for materials remain elevated.

Also likely to dampen some demand for new home is broader inventories of existing units for sale and mortgage rates that walked back the declines seen in August and September. The monthly Freddie Mac rate for a 30-year fixed rate mortgage is now about 6.8 percent in November, about the same as 6.8 percent in July.

The index for present sales is up 2 points to 49 in November and the highest since 51 in April. The expected sales index is up 7 points to 64 in November, the highest since 73 in April 2022 when mortgage rates were on the rise after the historic lows that prevailed in 2019 and 2020. The index for buyer traffic is up 3 points to 32 in November and its highest since 35 in April 2024. Homebuyers may have begun to accept that the dip in mortgage rates is done for the time being and that an under 7 percent rate for a mortgage is the present reality.

Homebuilders are a little less generous with incentives to get contracts signed. In November, 60 percent of homebuilders offered incentives, down from 62 percent in October and the same as 60 percent in November 2023. Among builders, 31 percent offered a price cut, down from 32 percent in October and 36 percent in November 2023. The size of the price cut is down to 5 percent in November from 6 percent in the prior month and in November 2023.

The HMI is expected at 43 again in November after ticking up to 43 in October from 41 in September.

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.