NAHB Housing Market Index: "Builder Confidence Begins Year Strong As Single-Family Growth Continues"

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 75 is down 1 from last month.

Here is the opening of this morning's monthly update:

Builder confidence in the market for newly built single-family homes edged one point lower to 75 in January, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. The last two monthly readings mark the highest sentiment levels since July 1999.

“Low interest rates and a healthy labor market combined with a need for additional inventory are setting the stage for further home building gains in 2020,” said NAHB Chairman Greg Ugalde. [link]

Here is the historical series, which dates from 1985.

(Click on image to enlarge)

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 (also through the previous month).

(Click on image to enlarge)

(Click on image to enlarge)