NAHB Housing Market Index: "Builder Confidence at 13-Month Low on Higher Material Costs, Home Prices"

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.

The latest reading of 75 is down slightly from last month.

Here's an excerpt from this morning's blog update:

Higher construction costs and supply shortages along with rising home prices pushed builder confidence to its lowest reading since July 2020, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. Builder sentiment in the market for newly built single-family homes fell five points to 75 in August.

Here is the historical series, which dates from 1985.

Housing Market Index

The HMI correlates fairly closely with broad measures of consumer confidence. Here is a pair of overlays with the Michigan Consumer Sentiment Index (through the previous month) and the Conference Board's Consumer Confidence Index (through the current month).