The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) shot higher in February, achieving a second monthly gain. NAHB’s chief economist Robert Dietz said the 7-point increase in the HMI brought it to 42, its highest level since September 2022. It was also the largest single-month increase in the index since June 2013 , except for the craziness surrounding the onset of the pandemic. The HMI measures the confidence of new single-family home builders in the health of their market. The current reading, Dietz says, may signal the housing market is turning a corner even as builders continue to contend with high construction costs and building material supply chain logjams. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The three component indices also posted second-straight gains. The index gauging current sales conditions in February rose 6 points to 46, the component charting sales expectations in the next six months increased 11 points to 48 and the one measuring buyer traffic increased 6 points to 29.
