June 21, 2024 Housing Market News: NAHB/Wells Fargo HMI, Student Housing Market, Trump’s Potential Impact, and Tampa’s Housing Director Resigns

Welcome to today’s roundup of the latest developments in the real estate sector! From the latest NAHB/Wells Fargo Housing Market Index insights, revealing builders’ sentiments and market trends, to potential shifts in the housing landscape with the upcoming presidential election, our coverage spans critical updates that could influence both the market and your decisions. Additionally, we delve into local news with a significant change in Tampa’s housing leadership. Stay informed with our comprehensive analysis and expert opinions to navigate these changing times effectively in the real estate world.

NAHB/Wells Fargo Housing Market Index (HMI) | NAHB

The NAHB/Wells Fargo Housing Market Index (HMI) is designed to gauge and track the pulse of the single-family housing market. The HMI is based on a monthly survey of single-family builders who are asked to rate three specific conditions of the housing market.

Each month, the HMI depicts overall builder sentiment toward housing market conditions on a scale ranging between 0 and 100. A higher reading (>50) is an indication that the majority of builders feel confident about the current and near-term outlook for housing. Lower readings signify less optimism among builders.

The HMI is a weighted average of the three components included in the monthly builder survey: present sales of new single-family homes, expected sales of single-family homes for the next six months, traffic of prospective buyers of new single-family homes. The weights are:

A panel of builders rates the first two on a scale of “good,” “fair” or “poor” and the last on a scale of “high to very high,” “average” or “low to very low”. An index is calculated for each component by applying the formula “(good – poor + 100)/2” or, for Traffic, “(high/very high – low/very low + 100)/2”.

Each index created this way has several desirable properties that make it relatively easy to interpret. In particular, each index:

Moreover, each percentage point shift from:

The panel of builders to whom the survey is sent is stratified by region of the country and size of the builder. The panel is refreshed on an annual basis to ensure optimal response rates and balanced participation from builders across the country.

Interest rates have a significant impact on the overall housing market conditions. When mortgage rates are low, housing demand is high. However, when mortgage rates are high, it becomes more challenging for many Americans to afford a monthly mortgage payment for a home that suits their needs. As home prices rise, many would-be home buyers are pushed to the sidelines, leading to decreased demand in the housing market and a drop in builder sentiment, as illustrated in the HMI. Elevated interest rates also impact the cost of borrowing for builders and can affect their ability to obtain construction loans.

Employment rates are another factor that can impact the Housing Market Index. When the economy is strong and more people are employed, the housing market tends to be more robust. This is because stable employment provides the income security needed to qualify for and afford a mortgage. However, when the pace of economic growth is slow and unemployment rates are high, it can lead to decreased demand in the housing market, resulting in a drop in the HMI. High unemployment rates create uncertainty, making securing financing and purchasing real estate harder, and leading to a significant drop in buyer demand.

Material costs are a major factor for any home building project. Builders can typically anticipate when prices rise and fall with supply and demand. But when supply chains experience delays and prices become especially volatile, as they did in the wake of the COVID-19 pandemic, the uncertainty can lead to diminishing builder confidence.

Inflationary pressures are also contributing to higher material costs. When the general cost of goods and services rises across the economy, it inevitably impacts the price of construction materials and builder sentiment.

History shows that the HMI has consistently reflected — and even predicted — periods of booms and busts in housing markets, as it was originally constructed to do.


The inaugural HMI survey in January 1985 showed a reading of 50, at a time when the annual rate of housing starts was around 1.7 million. The HMI series stayed within a relatively narrow band between 50 and 64 until the late 1980s when it began to decline due to problems in financial markets centered around the nation’s savings and loan industry.


During the resulting credit crunch and recession of the 1990s, the HMI dropped to 20 as annual housing starts declined to 1.0 million. The HMI and housing starts both began to recover shortly thereafter as the economy entered a period of sustained growth in the 1990s. In 1998 and 1999 the starts increased to 1.6 million and the HMI was consistently over 70.


From this high point, the HMI declined only modestly in the early 2000s, as the short recession caused by the .com bust and the turmoil resulting from the 9-11 attacks didn’t seem to slow the production of new housing much, if at all. By 2005 the HMI was back over 70 and annual housing starts surged to over 2.0 million.

Three years later, the financial market crisis emerged causing the Great Recession and an historic downturn in housing markets. The HMI hit its all-time low of 8 in January 2009, as housing starts dropped to a post-WWII low of around 0.5 million. Following the Great Recession, housing starts and the HMI recovered at a steady-but-very-slow pace.


Throughout much of the 2010s, the HMI generally remained within the mid-to-high 60s. The moderately strong results indicated that builders who managed to survive the Great Recession were doing reasonably well, thanks in large part to favorably low interest rates.


The HMI was particularly strong following the initial decline and V-shaped recovery associated with the COVID-19 pandemic, when interest rates were kept historically low. During this period, the HMI climbed to an all-time high of 90 in November of 2020, when starts had recovered to a rate of about 1.6 million per year. However, in the years that followed, rising interest rates and affordability challenges have increasingly stifled the housing market, as illustrated by HMI readings that have frequently fluctuated between the mid-30s and low-50s.

In 1994, a peer-reviewed article published in the Journal of Real Estate Research by John Goodman (a research economist from the Federal Reserve Board of Governors) showed that the NAHB survey was the only one of several well-known attitude surveys that significantly helped predict housing market variables like starts. NAHB economists revisited John Goodman’s article more than a decade later and found that the HMI survey retained essentially the same ability to predict housing starts that it had in 1994.

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Money Matters: The student housing market; pound pavement for results | Gold Country Media

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What The Housing Market Could Look Like If Donald Trump Wins The 2024 Presidential Election

According to experts and recent data, Donald Trump’s potential reelection could reshape the U.S. housing market amid soaring mortgage rates and escalating home prices. The current state of the housing market, characterized by two-decade high borrowing costs and record home prices, is straining affordability for many Americans. With the presidential election approaching, industry specialists are examining how Trump’s policies — ranging from deregulation to tax and trade measures — might influence market dynamics, potentially easing some pressures but also introducing new risks.

A survey suggests that the next presidential term, regardless of the winner, may not alter the course for lenders and mortgage origination activities. However, there are potential implications in areas such as interest rates, regulatory burdens, housing agency leadership, government control over Fannie Mae and Freddie Mac, and tax policy. While Trump’s policies may have the potential to ease some pressures on the housing market, there are concerns about the risks of under-regulated financial activities and the impact on the federal deficit.

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Tampa’s housing director is resigning, another setback for Mayor Castor

The city of Tampa’s housing director, Kayon Henderson, is resigning, adding to the list of senior economic development officials leaving Mayor Jane Castor’s administration. Henderson, who has been with the city for over a decade, played a crucial role in addressing the affordable housing crisis in Tampa. Her departure follows other high-level resignations, including Nicole Travis, the staffer overseeing economic development, and Alis Drumgo, the deputy administrator for development and economic opportunity. The exodus of senior leadership poses challenges for the city as it grapples with pressing concerns. Mayor Castor expressed gratitude for Henderson’s service and positive impact on addressing affordable housing challenges.

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