Homebuilders See Weaker Market in Early April 2022


The NAHB/Wells Fargo Housing Market Index (HMI) recorded a slight decline in early April 2022, per preliminary data released on April 18, 2022. The preliminary national HMI for April was 77, down from a revised value of 79 for March. Since the housing sector is a significant factor in overall U.S. economic activity, the HMI is widely used as a key economic indicator.

The HMI results from a monthly survey of National Association of Home Builders (NAHB) members. The NAHB states that the HMI “is designed to take the pulse of the single-family housing market.” Respondents rate current market conditions for the sale of new homes, forecast these conditions over the next six months, and assess the amount of traffic from prospective buyers of new homes.

Key Takeaways

  • The NAHB/Wells Fargo Housing Market Index (HMI) fell in early April 2022.
  • The preliminary April figure of 77 was down from 79 in March.
  • However, one component of the overall index, prospective single family sales for the next six months, was up.
  • Increased strength in the Northeast and South was offset by weakening in the Midwest and West.
  • The HMI is a predictor of housing starts during the next six months.
  • Housing starts, in turn, are a key economic indicator.

HMI Components

The NAHB/Wells Fargo HMI is a weighted average of three separate component indexes: Present Single-Family Sales, Single-Family Sales for the Next Six Months, and Traffic of Prospective Buyers.

The Present Single-Family Sales index had a preliminary value of 85 in April, down from a final figure of 87 for March. The Single-Family Sales for the Next Six Months index had a preliminary value of 73 in April, up from 70 in March. The Traffic of Prospective Buyers index had a preliminary value of 60 in April, down from 66 in March.

Regional Indexes

In addition to the national figure cited above, the HMI is also computed for four regions: Northeast, Midwest, South, and West.

Comparing the preliminary April 2022 figures to the revised March 2022 numbers, there was weakening in the Midwest (61 vs. 74) and the West (84 vs. 91) but strengthening in the Northeast (74 vs. 65) and the South (82 vs. 81).

Comparing the preliminary April 2022 figures to three-month moving averages, there was weakening in the Midwest (69 vs. 72), the South (82 vs. 84), and the West (89 vs. 90) but strengthening in the Northeast (72 vs. 71).



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