NAHB Housing Market Index Expected To Rise

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Peoples Home Equity comments on the National Association of Home Builder's Housing Market Index before it's released tomorrow on Monday, June 16th.

On Monday, June 16th, the National Association of Home Builders (NAHB) will release its latest Housing Market Index. Peoples Home Equity expects to see a good rise from the low levels shown in previous reports.

Contrary to many economic Indies, the NAHB’s housing market index is not based on financial data but rather the sentiment of home builders. The index which is released monthly summarizes the housing sentiment of home builders for the next 6 months. According to, home builder sentiment relates to “homes and sales expectations for the next six months and to rate traffic of prospective buyers.” After the survey of questions to home builders is recorded the index is calculated from a starting point of 50. Values over 50 indicate a good market condition while values under 50 represent a poor market condition. For the past four month the values have been, 46 (Feb), 46 (Mar) ,46 (April) ,and 45 (May). With the steep rise in weekly home sales over the past month, Peoples Home Equity expects to see a reflection in this housing market index. shows an expected rise in the index to 48.32 for June. Remember, this index is not based on how well the market is performing but how home builders perceive the market. The idea of the NAHB’s index is that a home builder’s perspective on the future may be more telling than looking at data from the past, such as pending home sales and quarter price growth. Hence, this index is regarded as a leading market indicator.

The index saw a sharp decline from January to February falling 10 points from 56 in January to 46 in February. This was quite a large decline considering that the index has never been above 78 or below 8. Given the narrow range of the index a 10 point change is significant. Perhaps home builders estimated correctly in February that the housing market is a bit week given that this year’s weekly home sales are lagging just behind that of last year. However, conditions have improved since the winter time when weather conditions were hindering home buyer activity, especially in the Midwest where Peoples home Equity centers most of its business. Now, the Midwest is seeing a resurgence of demand for housing and the availability of credit offered by lenders is rising. Peoples Home Equity hopes to see a reading above 50 in tomorrow’s Housing Market Index, but only time will tell. Regardless of what the data shows, home buyers should at least prepare themselves for the present. The present is showing rising home sales, price, and mortgage rates. Home buyers should prepare by at least apply for a home loan to lock in a home loan a competitive rate before purchasing a property becomes less affordable.

If interested in securing a competitive, lower rate mortgage, consider speaking with a Peoples Home Equity loan officer today details at: 262-563-4026

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Giorgio U Ferrero
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