Builder Sentiment Declines for Ninth Consecutive Month in August as Housing Continues to Slow

The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) reported that builder sentiment in the market for newly built single-family homes tumbled 3-points lower in September to a reading of 46. This marks the ninth consecutive monthly decline and the HMI’s lowest level since May 2014, with the exception of Spring 2020.

Any reading below 50 indicates that more builders view conditions as good rather than poor.

All three HMI components posted declines in September. Current sales conditions dropped three points to 54; sales expectations in the next six months declined one point to 46; and traffic of prospective buyers fell one point to 31.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell five points to 51, the Midwest dropped five points to 44, the South fell seven points to 56, and the West posted a 10-point decline to 41.