Housing Market Index
Candlefocus EditorThe HMI is composed of three components- the current single-family sales, sales prospects for the next six months, and the traffic of prospective buyers- each of which are rated by participating builders and then seasonally adjusted and weighted to create the HMI. By taking into account the views of individual builders, the HMI gives a comprehensive snapshot of the overall health of the housing market. It also provides insight into builder confidence and consumer demand, allowing policy makers, forecasters, and investors to make sound decisions.
The HMI is not limited to just the residential housing market. It can also be used to assess the market for other construction activities, such as wood-frame, non-residential and rental markets. Additionally, because it takes into account sales and traffic of both current and future buyers, the HMI can be a useful tool for studying trends in consumer confidence, consumer demand, and the overall health and direction of the economy.
Overall, the NAHB/Wells Fargo Housing Market Index is an important measure of sentiment among U.S. single-family home builders and a valuable resource for predicting the future of the housing market. With its three components taken into account, the HMI offers an accurate reflection of the overall health and direction of the housing market and is an important tool for forecasters and investors alike.