On Monday (12-19-22), 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 dropped 2 points lower in December to a reading of 31. This marks the twelfth consecutive monthly decline and the HMI’s lowest reading since mid-2012, except for the onset of the pandemic in early 2020. Any reading below 50 indicates that more builders view conditions as poor rather than good.
The three HMI components went in separate directions in December. Current sales conditions fell three points to a reading of 36, while traffic of prospective buyers held steady at a reading of 20. The bright spot was sales expectations in the next six months, which increased four points to a reading of 35.
Looking at the three-month moving averages for regional HMI scores, the Northeast fell five points to a reading of 37; the Midwest dropped four points to a reading of 34; the South fell six points to a reading of 36; and the West dropped three points to a reading of 26.
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