NAHB/Wells Fargo Housing Market Index

Filed Under » ,
Dictionary Says

Definition of 'NAHB/Wells Fargo Housing Market Index'

An index based on a monthly survey of members belonging to the National Association of Home Builders (NAHB) that is designed to measure sentiment for the U.S. single-family housing market. The NAHB/Wells Fargo Housing Market Index (HMI) is a widely watched gauge of the outlook for the U.S. housing sector.
 
The survey on which the index is based asks the NAHB’s 140,000-plus members to rate market conditions for current new home sales and in the next six months, as well as prospective buyer traffic for new homes. The HMI is a weighted average of separate diffusion indexes for these three series. Its reading can range between 0 and 100; a reading over 50 indicates that more builders view sales conditions as good compared with those who view them as poor.
Investopedia Says

Investopedia explains 'NAHB/Wells Fargo Housing Market Index'



The HMI is calculated as follows: The two series for market conditions for current new home sales and in the next six months are rated on a scale of Good, Fair and Poor, while the buyer traffic series is rated on a scale of High/Very High, Average and Low/Very Low. A diffusion index is then calculated for each series by applying a formula, after which each resulting index is seasonally adjusted and weighted to generate the HMI.
 
The HMI is produced by the Economics arm of the NAHB, one-third of whose members are home builders and/or remodelers, with the others in closely related sectors such as building materials, housing finance and real estate sales. NAHB’s builder members annually construct about 80% of the new homes built in the U.S.
 
The HMI displays a close correlation with U.S. single-family housing starts, which refers to the start of construction on privately-owned homes. Housing starts data is a key indicator of how the U.S. economy is faring and is supplied monthly by the U.S. Census Bureau. As the HMI is a gauge of homebuyers’ intentions, it can provide valuable clues about the near-term direction of housing starts. The HMI is released monthly at 10am EST on the day before housing starts data is released by the Census Bureau, which is generally around mid-month.

Articles Of Interest

  1.

    How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.

  2. Understanding The Case-Shiller Housing Index

    This index is a widely-used and respected barometer of the U.S. housing market and the broader economy.

  3. Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.

  4. Predict Inflation With The Producer Price Index

    Find out how the PPI can be used to gauge the overall health of the economy.

  5. Closing A Real Estate Deal In A Down Market

    We provide top tips on how to help sell your home in a rough market.

  6. 4 Types Of Home Renovation: Which Ones Boost Value?

    You think your updated house looks great, but potential buyers may not feel the same way.

  7. Why Housing Market Bubbles Pop

    Home price appreciation is not assured. Can you withstand the volatility in this market?

  8. Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.

  9. Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.

  10. Exploring Real Estate Investments

    Discover how owning properties can give you a roof over your head or a check in your pocket.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Network Effect

    A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example...

  2. Racketeering

    Racketeering refers to criminal activity that is performed to benefit an organization such as a crime syndicate. Examples of racketeering activity include...

  3. Lawful Money

    Any form of currency issued by the United States Treasury and not the Federal Reserve System, including gold and silver coins, Treasury notes, and Treasury bonds. Lawful money stands in contrast to fiat money, to which the government assigns value although it has no intrinsic value of its own and is not backed by reserves.

  4. Fast Market Rule

    A rule in the United Kingdom that permits market makers to trade outside quoted ranges, when an exchange determines that market movements are so sharp that quotes cannot be kept current.

  5. Absorption Rate

    The rate at which available homes are sold in a specific real estate market during a given time period.

  6. Yellow Sheets

    A United States bulletin that provides updated bid and ask prices as well as other information on over-the-counter (OTC) corporate bonds...
Trading Center