Image Source: Unsplash
 

The housing picture remains grim.
 

NAHB Wells Fargo Housing Market Index (HMI), chart by Mish
 

Housing cannot gain traction as mortgage rates are still too high and prices are out of sight.

Please consider the NAHB/Wells Fargo Housing Market Index (HMI) for August, 2025.

Key Findings
 

• Current sales conditions fell one point to 35.
• Sales expectations in the next six months held steady at 43.
• Traffic of prospective buyers posted a two-point gain to 22 but remains at a very low level.
• 37% of builders reported cutting prices in August down from 38% in July. This share has remained at 37% or 38% for the past three months.
• The average price reduction was 5% in August, the same as it’s been every month since last November.
• The use of sales incentives was 66% in August, up from 62% in July and the highest percentage in the post-Covid period.

NAHB Wells Fargo Housing Market Index (HMI) Since 1985
 

NAHB Wells Fargo Housing Market Index (HMI) Long Term, chart by Mish
 

The HMI is not as depressed as during the Great Recession, the 1991 recession, or the Covid recession but it is historically very weak.

NAHB Wells Fargo Housing Market Index vs Mortgage Rates
 

NAHB Wells Fargo Housing Market Index (HMI) vs Mortgage Rates, chart by Mish
 

Average mortgage rates are through July. The Index is through August.

Notably, buyer traffic went in a deep plunge when mortgage rates approached 5 percent.

The current mortgage rate from Mortgage News Daily is 5.69 percent.

However, home prices continued to rise so it would take a huge drop in price as well before there is a meaningful improvement in affordability.

Existing-Home Sales Decline 2.7 Percent
 

On July 23, I reported Existing-Home Sales Decline 2.7 Percent, Median Price New Record High

Hooray, higher prices? That’s the message from the NAR.

That alleged Median Price Record did not happen. The NAR does a terrible job at seasonal adjustments (if it tries at all).

Click on above link for discussion. And expect rapid decline now in NAR median prices.

Most Completed Home For Sale Since the Great Recession
 

Also note Home Builders Have the Most Completed Home For Sale Since the Great Recession

You have to go back to July 2009 to find more completed homes for sale.

Factor in rising home inventories, lags, and a slowing economy. Home price pressures are hugely negative.

The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again
 

On July 29, 2025, I reported The Housing Top Is Likely In, Case-Shiller Home Prices Drop Again

The Case-Shiller Home Price Index declined another 0.3 percent in May.

Prices have dropped, but the Case-Shiller National index is up 52.1 percent since January 2020.

Although price pressures are hugely negative, affordability is in the gutter.

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