NAHB: "Builder Confidence Steady but Future Sales Expectations Hit Six-Month High", Negative territory for 17 consecutive months
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 32, unchanged from 32 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.
From the NAHB: Builder Confidence Steady but Future Sales Expectations Hit Six-Month High
Click on graph for larger image.
This graph shows the NAHB index since Jan 1985.
This was below the consensus forecast.
From the NAHB: Builder Confidence Steady but Future Sales Expectations Hit Six-Month High
Builder sentiment levels remained unchanged in September but lower mortgage rates and expectations that the Federal Reserve will soon cut the federal funds rate led to higher future sale expectations in the coming months.
Builder confidence in the market for newly built single-family homes was 32 in September, unchanged from the August reading, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today. While builder sentiment has hovered at a relatively low reading between 32 and 34 since May, builders expressed optimism that a more favorable interest rate climate could bring hesitant buyers off the sidelines in the final quarter of 2025.
“While builders continue to contend with rising construction costs, a recent drop in mortgage interest rates over the past month should help spur housing demand,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C.
“NAHB expects the Fed to cut the federal funds rate at their meeting this week, which will help lower interest rates for builder and developer loans,” said NAHB Chief Economist Robert Dietz. “Moreover, the 30-year fixed rate mortgage average is down 23 basis points over the past four weeks to 6.35%, per Freddie Mac. This is the lowest level since mid-October of last year and a positive sign for future housing demand.”
In a sign that the housing market remains soft, the latest HMI survey also revealed that 39% of builders reported cutting prices in September, up from 37% in August and the highest percentage in the post-Covid period. Meanwhile, the average price reduction was 5% in September, the same as it’s been every month since last November. The use of sales incentives was 65% in September, essentially unchanged from 66% in August.
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The HMI index gauging future sales expectations in September rose two points to 45, the highest reading since March of this year. The component measuring current sales conditions held steady at 34 while the gauge charting traffic of prospective buyers posted a one-point decline to 21.
Looking at the three-month moving averages for regional HMI scores, the Northeast was unchanged at 44, the Midwest gained one point to 42, the South held steady at 29 and the West increased one point to 26.
emphasis added
This graph shows the NAHB index since Jan 1985.
This was below the consensus forecast.
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