The NAHB/Wells Fargo housing market index is unchanged to 46 in December from November. The consensus is not meaningful below is 47 in the Econoday survey of forecasters. Homebuilders remain relatively unoptimistic, although with hints that they are anticipating brighter times. While mortgage rates have come down a bit, hopes for rates below the 6 percent-mark have faded with prospects of a more rapid pace of rate cuts by the FOMC while core inflation persists noticeably above the Fed's 2 percent objective.

The Freddie Mac average monthly rate for a 30-year fixed rate mortgage is down to 6.65 percent for December to date compared to 6.81 percent in November but is still above 6.51 percent in October. Potential homebuyers are fewer during the winter months and present interest rates are not particularly tempting despite a bigger selection of homes and more negotiating power on price and terms.

The index for current sales of single-family homes is 48 in December, unchanged from November. The index for expected sales is up to 66 in December from 63 in November and is the highest since 73 in April 2022. Homebuilders are expecting regulatory easing that should reduce building costs, although they still face problems finding skilled labor and lots suitable for building.

In December, 31 percent of homebuilders offered a price cut to close a sale, the same as in November and below 36 percent in December 2023. The size of the price cut is 5 percent in December and November compared to 6 percent in December a year ago. Also, 60 percent of homebuilders offered some sort of sales incentive in December and November, the same as a year earlier.

Home building is seen better in December with the HMI at 47 versus 46 in November.

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.