by Calculated Threat on 12/17/2024 10:00:00 AM
The Nationwide Affiliation of House Builders (NAHB) reported the housing market index (HMI) was at 46, unchanged from 46 final month. Any quantity beneath 50 signifies that extra builders view gross sales situations as poor than good.
From the NAHB:
Builder Confidence Strikes Increased as Election Uncertainty is Lifted
Builder sentiment held regular to finish the 12 months as excessive residence costs and mortgage charges offset renewed hope about a greater regulatory enterprise local weather in 2025. Alongside these traces, builders expressed elevated optimism for increased gross sales expectations within the subsequent months.
Builder confidence available in the market for newly constructed single-family properties was 46 in December, the identical studying as final month, in response to the Nationwide Affiliation of House Builders (NAHB)/Wells Fargo Housing Market Index (HMI) launched at the moment.
“While builders are expressing concerns that high interest rates, elevated construction costs and a lack of buildable lots continue to act as headwinds, they are also anticipating future regulatory relief in the aftermath of the election,” mentioned NAHB Chairman Carl Harris, a customized residence builder from Wichita, Kan. “This is reflected in the fact that future sales expectations have increased to a nearly three-year high.”
“NAHB is forecasting additional interest rate cuts from the Federal Reserve in 2025, but with inflation pressures still present, we have reduced that forecast from 100 basis points to 75 basis points for the federal funds rate,” mentioned NAHB Chief Economist Robert Dietz. “Concerns over inflation risks in 2025 will keep long-term interest rates, like mortgage rates, near current levels with mortgage rates remaining above 6%.”
The newest HMI survey additionally revealed that 31% of builders lower residence costs in December, unchanged from November. In the meantime, the typical value discount was 5% in December, the identical fee as in November. Using gross sales incentives was 60% in December, additionally unchanged from November.
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The HMI index gauging present gross sales situations held regular at 48 whereas the gauge charting site visitors of potential consumers posted a one-point decline to 31. The element measuring gross sales expectations within the subsequent six months rose three factors to 66, the very best degree since April 2022.Trying on the three-month shifting averages for regional HMI scores, the Northeast elevated two factors to 57, the Midwest moved two factors increased to 46, the South posted a two-point acquire to 44 and the West fell one level to 40.
emphasis added
Click on on graph for bigger picture.
This graph reveals the NAHB index since Jan 1985.
This was on the consensus forecast.
