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US: Housing Market Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 33 | 31 to 33 | 33 | 32 |
Highlights
U.S. housing market activity remains tepid and, underscoring the market's struggles, builders' increased reliance on price incentives to attract homebuyers continued in July. The expectation continues to be that single-family housing starts will decline this year.
Builder confidence in the market for newly built single-family homes was 33 in July, up from 32 in June but below July 2024's reading of 41. Sentiment has now been stuck in negative territory for 15 straight months.
[T]he housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates., the report said.
Thirty-eight percent of builders surveyed said they slashed prices in July, the highest percentage since NAHB began tracking this figure on a monthly basis in 2022. This compares with 37 percent in June and 34 percent in May.
The average price reduction was 5 percent in July, the same as every month since November 2024. The use of sales incentives was 62 percent, unchanged from June.
Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges, the NAHB said. Single-family permits are down 6 percent on a year-to-date basis and builder traffic in the HMI is at a more than two-year low.
Market Consensus Before Announcement
The index is expected to remain depressed at 33 in July versus 32 in June and 41 in June 2024.
Definition
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.
Description
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.
