New Home Sales Down in May

National Association of Home Builders Housing Market Index Up from Last Month

The latest reading of 90 is up 5 from last month’s 85 and at its highest level in the indicator’s history, exceeding its December 1998 record.

 

 

By Jill Mislinski

The National Association of Home Builders (NAHB) Housing Market Index (HMI) is a gauge of builder opinion on the relative level of current and future single-family home sales. It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.

The latest reading of 90 is up 5 from last month’s 85 and at its highest level in the indicator’s history, exceeding its December 1998 record.

Here’s an introduction from this morning’s blog update:

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In another sign that housing continues to lead the economy forward, builder confidence in the market for newly-built single-family homes increased five points to 90 in November, shattering the previous all-time of 85 recorded in October, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. Builder (NYSEARCA:XHB)confidence levels have hit successive all-time highs over the past three months.

Here is the historical series, which dates from 1985.

 

Housing Market Index

The HMI correlates fairly closely with broad measures of consumer confidence. Here is a pair of overlays with the Michigan Consumer Sentiment Index (through the previous month) and the Conference Board’s Consumer Confidence Index (through the current month).

HMI and Consumer Sentiment

HMI and Consumer Confidence