There was some hope that we could end the year with the first month-over-month increase since 2021. Unfortunately, it was not to be, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index
- NAHB/Wells Fargo Housing Market Index fell to 31 in December, this is 2 points below last month and puts the index down 52 points from the start of the year.
- Economists had projected a slight increase to 34 to close out the year.
Since When. This is the lowest monthly print since the start of the pandemic when the index fell 40 points in one month to 30 in April 2020.
- Before the pandemic the last time the index fell this low was June 2012 as the industry was recovering from the ’08 crash.
The South On Top. The South had the best index in six of the last eleven months and will end the year on top with a two-point increase to an index of 35 in December.
- The Northeast held at 32, the Midwest fell five points to 30, and the West fell three points to 25 to close out the year.
The Future Is Now. All year, builders have felt much better about the current state of the market versus the next six months. That, however, almost changed in December thanks to a seven-point swing. Builders put current conditions only one point ahead of the next six months with the indices at 36 and 35, respectively.
- Traffic of prospective buyers held at 20 to close out the year. This is the lowest level on record since April 2020 and before the pandemic, we had not seen a number that low since the end of 2011.
Analysis. Robert Dietz, NAHB Chief Economist, said things are not good currently but there is a silver lining. “The silver lining in this HMI report is that it is the smallest drop in the index in the past six months, indicating that we are possibly nearing the bottom of the cycle for builder sentiment.”