NAHB / Wells Fargo Housing Market Index

The NAHB / Wells Fargo Housing Market Index (HMI, also known as the NAHB House Market Index ) is one of the most important leading economic indicators for economic development in the United States and is published by the National Association of Home Builders (NAHB). It reflects the business expectations of construction companies specializing in single-family homes.

concept

The NAHB / Wells Fargo Housing Market Index (HMI) has been published by the National Association of Home Builders (NAHB) since January 1985 and is derived from a monthly survey of around 400 building contractors . The companies provide an assessment of the current home sales and their expectations of sales within the next 6 months. The information can be rated as good, moderate or weak. The construction companies are also asked to rate the activity of the potential buyers as high to very high, average or low to very low.

The national organization of housing companies calculates a seasonally adjusted overall index from the number of points for each answer. While an index value less than 50 is an indication of a future economic downturn , index values ​​over 50 represent assumed positive economic developments . The rating scale goes from 0 to 100, with 0 being the worst and 100 being the best. The HMI has been shown regionally since September 2005. An index is calculated for each of the four regions Northeast, South, Midwest and West.

The weighting of the HMI is as follows:

• Present = 0.5920
• Future = 0.1358
• Activity = 0.2722

The financial markets react sensitively to unexpected changes in the index; it is perceived as an early indicator of economic development. HMI, Case-Shiller-Index or FHFA House Price Index belong to the group of indicators, the development of which has a noticeable influence on the stock indices .

history

Historical overview

The Housing Market Index (HMI) started in January 1985 with 50 points. By February 1989, the mood among construction companies was over 50 points. During the recession in the early 1990s, the index fell in January 1991 to a low of 20 points. In October 1992 the mood of the building contractors rose again above the threshold of 50 points. In December 1998 the HMI achieved an all-time high of 78 points. In May 2006 the sentiment barometer fell below the 50 point mark for the first time since November 2001.

The economic slowdown in the USA from around 2005, falling growth rates in labor productivity , especially in the construction industry, and the later rise in the US base rate to up to 5.25 percent in June 2006 triggered a chain reaction. Low-income borrowers could no longer pay the increased installments on their adjustable-rate loans and had to sell their home. House prices plummeted from July 2006 onwards due to the increase in real estate sales, and the falling value of real estate meant that banks and investors had increasingly unsecured loan claims. The insolvency of debtors now resulted in losses for banks and investors.

A long period of price increases in the real estate market had turned into a real estate bubble in the USA . With the falling property prices, the financial crisis became acute from 2007 onwards. Initially, these problems in the real estate sector primarily affected subprime loans , which were mainly granted to borrowers with low credit ratings . The speculative bubble burst. The banks stayed on their loans. There were price falls on the global stock markets. Because bad loans were resold ( securitization ) and they were scattered all over the world, the crisis spread globally due to the close interlinking of individual economies and financial flows. In January 2009 the Housing Market Index marked an all-time low of 8 points.

After an interim high in May 2010 at 22 points, the mood among construction companies in the USA fell to 13 points in June 2011, the lowest level since September 2010. The reasons for the decline were the weak economic development, the increase in foreclosures and the rise Building-costs. Numerous potential home buyers did not want to sell their existing home under market conditions or had problems getting access to credit to finance a property.

In December 2012 the NAHB / Wells Fargo Housing Market Index rose to 47 points, the highest level since April 2006.

Annual development

The table shows the development of seasonally adjusted data for the Housing Market Index since 1985.

year	Peak	Lowest point	Final stand
1985	59	49	57
1986	65	55	64
1987	63	50	51
1988	60	49	60
1989	54	43	43
1990	44	22nd	22nd
1991	42	20th	35
1992	56	44	56
1993	71	51	71
1994	70	43	43
1995	55	40	53
1996	61	49	55
1997	60	52	60
1998	78	60	78
1999	77	69	70
2000	69	57	57
2001	60	48	55
2002	63	55	63
2003	69	55	69
2004	71	66	71
2005	72	57	57
2006	57	30th	33
2007	39	18th	18th
2008	20th	9	9
2009	19th	8th	16
2010	22nd	13	16
2011	21st	13	21st
2012¹	47	24	47

¹ December 31, 2012

Web links

• National Association of Home Builders
• NAHB / Wells Fargo Housing Market Index

Individual evidence

1. ↑ Markt-daten.de: NAHB Housing Market Index ( Memento of the original from November 17, 2011 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 
2. ↑ Markt-daten.de: NAHB real estate market index ( Memento of the original from October 7, 2011 in the Internet Archive ) Info: The archive link has been inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. 
3. ↑ BörseGo AG: NAHB-Index remains in the basement , May 16, 2011
4. ↑ BörseGo AG: NAHB house index at 9-month low , from June 15, 2011
5. ↑ National Association of Home Builders: NAHB / Wells Fargo National HMI - History ( Memento of the original from May 19, 2011 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice.