Housing Market Index

NAHB/Wells Fargo Housing Market Index (HMI): What it Is and Why It Matters Key takeaways
The HMI is a monthly sentiment index of U.S. single‑family home builders conducted by the National Association of Home Builders (NAHB) in partnership with Wells Fargo.
It aggregates builders’ ratings of current sales, six‑month sales expectations, and prospective‑buyer traffic into a single index that ranges from 0 to 100.
Readings above 50 indicate a net favorable view; the HMI closely correlates with single‑family housing starts and is used as a short‑term indicator of construction activity. What the HMI measures
The HMI gauges builder sentiment about the single‑family housing market. Participating NAHB members rate:
Current single‑family sales (good / fair / poor)
Sales expectations over the next six months (good / fair / poor)
Traffic of prospective buyers (high/very high / average / low/very low) Explore More Resources

How the HMI is calculated
Each of the three components is converted into a diffusion index:
Present and future sales: (good − poor + 100) / 2
Buyer traffic: (high/very high − low/very low + 100) / 2
Component indices are seasonally adjusted.
A weighted average produces the HMI using weights chosen to maximize historical correlation with single‑family housing starts:
Present sales: 0.5920
Future sales (6 months): 0.1358
Traffic: 0.2722
The resulting index ranges from 0 (very negative) to 100 (very positive). Values above 50 signal a generally favorable market outlook. Why the HMI matters
The HMI is a timely gauge of builder sentiment that tends to move ahead of changes in single‑family housing starts, a key economic and construction activity indicator.
Because new home construction has broad economic effects (materials, furnishings, financing, employment), HMI shifts can signal broader trends in the housing sector and near‑term economic activity.
The index is widely followed by economists, policymakers, lenders, and market participants as a leading indicator for residential construction. Explore More Resources

Release timing and historical notes
The HMI is released monthly, typically at 10:00 a.m. ET on the 11th business day of the month (often the day before the Census Bureau’s housing starts report).
Historical extremes: the HMI fell to a record low of 8 in January 2009 and reached a record high of 90 in November 2020. Sources
National Association of Home Builders (NAHB) — HMI methodology and historical data
U.S. Census Bureau — housing starts and permits data Explore More Resources