bee Calculated Risk On 2/18/2025 10:00 AM AM
The National Association of Home Builders (NAHB) Reported the Housing Market Index (HMI) was at 42, Down from 47 last month. Any number below 50 indicates that more builders view sales conditions as poor than good.
From the Nahb: Builder Confidence Falls on Tariff and Housing Cost Concerns
Builder Sentiment Fell Sharply in February over concerns on tariffs, elevated mortgage rates and high housing costs.
Builder Confidence in the Market for Newly Built Single-Family Homes was 42 in February, Down Five Points from January and the Lowest Level in Five Monthsaccording to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released today.
“While Builders Hold Out Hope for Pro-Development Policies, particular for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI,” said Nahb Chairman Carl Harris, A Custom Home Builder from Wichita, can. “Uncertainty on the tariff front helped Push Builders’ Expectations for Future Sales Volume Down to the Lowest Level Since December 2023. Incentive use may also be weakening as a sales strategy as Elevated interest rates reduce the pool of eligible home buyers.”
“With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has Builders further concerned about costs,” said Nahb Chief Economist Robert Dietz. “Reflecting this outlook, Builder responses collected prior to a pause for the proposed tariffs on goods from Canada and mexico Yielded a Lower HMI reading of 38, while those collected after the announced one-month pause a score of 44. of Shelter inflation requires bending the housing cost curve to enable adding more attainable housing.
The latest hmi survey also revealed that 26% of builders cut home prices in February, down from 30% in January and the lowest share since may 2024. Meanwhile, the average price reduction was 5% in February, the same rate as the pre -rate. . The use of Sales Incentives was 59% in February, Down from 61% in January.
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All three of the major HMI Indices Posted Losses in February. The HMI Index Gauging Current Sales Conditions Fell Four Points to 46, The Component Measuring Sales Expectations in the Next Six Months Plunged 13 Points to 46, and the Gauge Charting Traffic of Prospective Buyers Posted a three-Point DECLINE TO 29.Looking at the three-month moving averages for regional HMI scores, the Northeast Fell three points in February to 57, the midwest moved two points lower to 45, the West edged one-Point Lower to 39 and the South Hero steady steady at 46.
Emphasis added
Click on graph for larger image.
This graph shows the nahb index since Jan 1985.
This was below the consensus forecast.