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US: Housing Market Index
| Consensus | Consensus Range | Actual | Previous | |
| Index | 39 | 37 to 40 | 39 | 38 |
Highlights
The NAHB/Wells Fargo housing market index in December continues to climb from the low levels in the summer and fall of 2025, but the reading remains well below levels consistent with an expanding market for new single-family homes. Economic uncertainty and hopes for lower mortgage rates are keeping some buyers out of the housing market, and builders face more competition from increased supply of existing units. Rising building costs for materials including the imposition of higher tariffs and labor are keeping builders cautious about new construction of homes.
The Freddie Mac average monthly rate for a 30-year fixed rate mortgage has been declining steadily in the last few months. After a near-term peak of 6.82 percent in May and June, the index dips to 6.72 percent in July, then to 6.59 percent in August, and 6.35 percent in September. The monthly average is little changed in the last three months at 6.25 percent in October, 6.24 percent in November, and 6.21percent for December to-date. Lower interest rate means greater affordability, but prices and regional housing prices and supplies will be important to potential buyers.
The index is 39 in December after an unrevised 38 in November, and the highest since 40 in April. The December reading matches the consensus in the Econoday survey of forecasters. Homebuilders have seen a much cooler market as potential buyers remain sensitive to interest rates, renters have less incentive to buy now that rent increases have eased, and the existing home market sees current owners finding life circumstances that mean selling is more of an option. Some homeowners have held on to mortgages which were at record lows a few years ago but are now willing to sell and use the significant equity acquired to up- or down-grade their home.
The index for present sales ticks up 1 point to 42 in December and is the highest since 45 in April. The index for expected sales is also up 1 point to 52 in December, regaining some of the ground after the 3 point decline to 51 in November from 54 in October. However, the index for buyer traffic is unchanged at 26 in December from November, although it remains the highest since 29 in February.
In December 40 percent of homebuilders cut prices an average of 5 percent compared to 41 percent in November with a 6 percent average price cut. Although the size of the price cut has not varied much in the past two years. The percentage of homebuilders offering incentives is up to 67 percent in December after 65 percent in the prior three months. The NAHB noted that December is the highest percentage in the post-Covid period.
Market Consensus Before Announcement
The consensus sees the index up to 39 in December from 38 in November.
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.
