U.S. Housing Market Index Rebounds in September
Summary
- Home builder sentiment improves in Sept. after four straight m/m declines.
- All three HMI components rise, w/ the largest m/m increase in prospective sales in six months (+8.2%).
- Regional strength is widespread, w/ the biggest m/m gain in the Northeast (+19.6%).
The Housing Market Index (HMI) from the National Association of Home Builders/Wells Fargo rose 5.1% m/m (-6.8% y/y) to 41 in September after declines of 4.9% to 39 in August and 4.7% to 41 in July. The September reading was the first m/m increase since March. A reading of 40 had been expected in the INFORMA Global Markets survey. The HMI had been below the breakeven point of 50 for five consecutive months. The September index, lower than 44 in September 2023 and a high of 56 in July 2023, was 54.4% below a record-high 90 in November 2020. The average HMI level was 44 in 2023, 59 in 2022, and 81 in 2021.
Notably, the average rate on a 30-year fixed rate mortgage fell to 6.20% in the September 12 week, the lowest since the February 9, 2023 week, from 6.35% in the September 5 week, data from Freddie Mac showed. It was down from a high of 7.79% in the October 26, 2023 week.
All the three HMI components increased this month. The index of present single-family sales conditions increased 2.3% (-10.0% y/y) to 45 in September, the first m/m gain since April, following a 4.3% decline to 44 in August. The latest reading was below 50 in September 2023 and 53.1% below a record-high 96 in November 2020. The index of expected single-family sales for the next six months rose 8.2% (8.2% y/y) to 53 in September, the third straight m/m rise to the highest level since April, after a 2.1% increase to 49 in August. The September level was higher than 49 in September 2023 but 40.4% below a peak of 89 in November 2020. The index measuring traffic of prospective buyers rose 8.0% (-10.0% y/y) to 27 in September, the first m/m rise since March, after a 7.4% decrease to 25 in August. The index was below 30 in September 2023 and 64.9% below a record-high 77 in November 2020.
All the regional HMIs posted m/m increases this month. The index for the Northeast rebounded 19.6% (14.6% y/y) to 55 in September, the first m/m gain since June, following a 2.1% decline to 46 in August. The index for the West jumped 13.5% (0.0% y/y) to 42 in September after holding steady in August, registering the highest level since April and above a low of 28 in November 2023. The index for the Midwest recovered 10.5% (10.5% y/y) to 42 in September, the highest reading since May, after three successive m/m decreases. The index for the South rose 2.6% (-16.7% y/y) to 40 following a 9.3% August decline to 39; nevertheless, having remained below a record-high 90 in November 2020. These regional series begin in December 2004.
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.
These data are included in Haver's SURVEYS database. The Informa Global Markets survey is in Haver's MMSAMER database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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