Builder sentiment indexes summarize what builders say about current and expected market conditions; they do not count homes sold or forecast investment returns. The clearest example is the NAHB/Wells Fargo Housing Market Index (HMI), a monthly 0–100 survey measure of confidence in the U.S. market for newly built single-family homes. Investors can use its overall reading and three components as context for demand, then compare them with housing and economic data.
What does the NAHB Housing Market Index measure?
The National Association of Home Builders (NAHB) and Wells Fargo HMI tracks builders’ views of the new single-family housing market. Builders assess current sales, expected sales over the next six months, and traffic from prospective buyers. NAHB describes the index as a gauge of the single-family market’s pulse. A reading above 50 means more builders report confidence in current and near-term conditions than report otherwise; it is not a claim that sales or construction are above a particular level. NAHB’s HMI methodology and release page
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The HMI is not a count of homes sold or started, nor a measure of house prices, existing-home transactions, remodeling, rents, or the whole residential construction industry. Its scope is specifically builders’ sentiment about new single-family housing in the United States.
How is the composite calculated?
NAHB combines three survey components into one weighted composite. Builders rate current and expected sales as good, fair, or poor; they rate prospective-buyer traffic on a scale from high or very high to low or very low. NAHB gives the sales-question calculation as (good minus poor plus 100) divided by 2, with the equivalent high/low calculation for traffic.
#1 Best Overall
| Component | What builders assess | Weight in composite |
|---|---|---|
| Present sales | Current sales of new single-family homes | 0.5920 |
| Expected sales | Sales over the next six months | 0.1358 |
| Buyer traffic | Traffic of prospective buyers | 0.2722 |
The panel is stratified by region and builder size and refreshed annually, according to NAHB. The weighting means the headline composite can obscure differing signals among its parts, so the components are worth checking alongside the overall figure. NAHB’s HMI methodology
How should investors interpret the index?
Read movement as a sentiment signal, not a trade instruction
A rising HMI indicates that surveyed builders are reporting improving sentiment; a falling reading indicates deterioration. Neither movement, by itself, establishes what will happen to homebuilder shares, home prices, or the broader economy. NAHB says a 1994 peer-reviewed study by Federal Reserve Board research economist John Goodman found the HMI significantly helped predict housing-market variables such as starts among the attitude surveys examined. NAHB reports that a later reassessment found essentially similar predictive ability. That is historical evidence of a relationship with housing variables, not proof of current predictive accuracy or a strategy for earning investment returns. NAHB’s discussion of HMI predictive ability
Rank #2
Look at the components before drawing a conclusion
Current sales describe builders’ reported present conditions, six-month expectations capture their near-term outlook, and buyer traffic offers a separate demand-side reading. If those components move in different directions, the composite can hide a mixed picture. Check whether the headline change is broad-based or concentrated in one part of the survey.
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Compare sentiment with observed housing conditions
Use the HMI alongside housing starts, new-home sales, mortgage conditions, affordability, employment, and building costs. Interest rates, employment, material costs, and inflation can affect builder sentiment, according to NAHB. The survey and observed data answer different questions: the HMI reports builders’ assessments, while measures such as starts or sales record activity. NAHB’s HMI methodology and release page
What the September 2026 reading shows
In its September 2026 release, NAHB reported an HMI of 32, down three points. Current sales stood at 35, six-month sales expectations at 37, and prospective-buyer traffic at 23. The components suggest that builders’ views were not identical across present sales, expectations, and buyer visits. The same release said 38% of builders cut prices that month, with an average reduction of 6%, and 66% used sales incentives. These are dated September 2026 figures, not standing conditions; consult the latest monthly release for a current reading. NAHB’s September 2026 HMI release
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How does the HMI differ from other housing measures?
When comparing indexes, check who responds, which housing segment is covered, whether the inputs are survey answers or observed data, how often it is published, and whether it is an index or a set of separate readings.
| Measure | Input and coverage described in the cited source | How it differs from HMI |
|---|---|---|
| NAHB/Wells Fargo HMI | Builder survey focused on new single-family housing | Measures builders’ sentiment through three component questions. |
| REALTORS® Confidence Index | Member survey measures, as described in a Fannie Mae historical paper | Different respondent group; the paper is historical and does not establish current availability or form. |
| Freddie Mac Multi-Indicator Market Index (MiMi) | Composite of market data, as described in the same historical paper | Market-data composite rather than a builder sentiment survey; current availability or form is not established by that paper. |
| Pulsenomics/Zillow Housing Confidence Index | Consumer survey with market, expectations, and homeownership-attitude sub-indexes, as described in the historical paper | Consumer rather than builder sentiment; the cited historical description does not confirm the series’ current form. |
Fannie Mae’s paper also describes the HMI as a monthly mail survey of NAHB builder members that began in January 1985 and records an approximate response count of 400 per month at the time documented. That figure is historical, not a current response-count claim. Fannie Mae, Building a Home Purchase Sentiment Index
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One free scan finds every outdated or missing driver and matches the right update for your exact hardware.Free scan · exact hardware matchNAHB publishes other measures for different questions, including the Remodeling Market Index, Multifamily Market Survey, and Home Building Geography Index. They cover segments or topics outside the HMI’s new single-family focus. NAHB index directory
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