U.S. Home Builders Sentiment Holds Steady in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Overall index remains at highest level since July 2023.
- Component movement is mixed.
- Regional indexes diverge.
The Housing Market Index compiled by the National Association of Home Builders/Wells Fargo remained at 51 (+13.3% y/y) in April. It was only the second time the index surpassed the break-even point of 50 since last July. The index stands below a July 2023 high of 56 and a November 2020 peak of 90.
The average rate on a 30-year fixed rate mortgage increased to 6.88% last week compared to 6.82% in the prior week, down from a high of 7.79% in the last week of October, according to Freddie Mac.
The single-family sales measure rose 1.8% (11.8% y/y) to 57 this month from 56 in March. It was the highest reading since August 2023. The prospective sales index in six months fell 3.2% (+20.0% y/y) to 60 from 62 in March. The traffic of prospective buyers’ index increased 2.9% (12.9% y/y) to 35 in April from 34 in March. The reading was increased from a November low of 21 but remained below the November 2020 high of 77.
Housing performance across the country was mixed in April. In the Northeast, the index rose 6.6% (47.7% y/y) to 65 from 61. The index remained above the December 2022 low of 32. In other regions of the country, the index for the Midwest rose 2.0% (25.0% y/y) to 50 from 49 in March. In the South, the index fell 1.9% to 51 (+2.0% y/y) from 52 in March and stayed below the high of 90 in November 2020. The index in the West rose 8.9% (22.5% y/y) to 49 from 45 in March. The index hit a low of 28 in November.
The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.
These data are included in Haver's SURVEYS database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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