The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) declined 1 point to 42 in July. This is the lowest reading since December 2023.
“While buyers appear to be waiting for lower interest rates, the six-month sales expectation for builders moved higher, indicating that builders expect mortgage rates to edge lower later this year as inflation data are showing signs of easing,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kansas.
“Though inflation is still above the Federal Reserve’s target of 2%, it appears to be back on a cooling trend. NAHB is forecasting Fed rate reductions to begin at the end of this year, and this action will lower interest rates for home buyers, builders and developers,” said NAHB Chief Economist Robert Dietz. “And while home inventory is increasing, total market inventory remains lean at a 4.4 months’ supply, indicating a long-run need for more home construction.”
The HMI Index charting current sales conditions in July fell one point to 47, the component measuring sales expectations in the next six months increased 1 point to 48 and the gauge charting traffic of prospective buyers declined by 1 point to 27.
Looking at the three-month moving average for regional HMI scores, the Northeast fell 6 points to 56, the Midwest dropped 4 points to 43, the South decreased 2 points to 44 and the West posted a four-point decline to 37.
Read the NAHB release.
