U.S. Housing Market Index Falls in July; Third M/M Decline in Four Months
Summary
- HMI weakens m/m in July, indicating most builders remain pessimistic about the current and near-term housing outlook.
- All three HMI components down, w/ the steepest m/m drop in prospective buyer traffic (-8.0%).
- Mixed regional performance m/m: down in the Northeast (-18.0%) and West (-7.4%); up in the Midwest (+2.2%); flat in the South.
The Housing Market Index (HMI) from the National Association of Home Builders/Wells Fargo fell 5.6% m/m (+3.0% y/y) to a slightly lower-than-expected 34 in July following a 2.7% decrease to 36 in June (initially -5.4%; 35) and an 8.8% increase to 37 in May (unrevised). July marked the third m/m decline in four months and a three-month low. A reading of 35 had been expected in the INFORMA Global Markets survey. The HMI had remained below the breakeven 50 level since May 2024. The July index, while slightly above 33 in July 2025, was 39.3% below a high of 56 in July 2023 and 62.2% below a record-high 90 in November 2020.
Notably, the average 30-year fixed mortgage rate rose to 6.55% in the July 16 week—the highest since the week of August 28, 2025—from 6.49% in the July 9 week, compared to 6.49% during all of June, according to Freddie Mac. The rate was above its recent low of 5.98% in the February 26 week but below a high of 7.22% in the week of May 2, 2024 and a peak of 7.79% in the week of October 26, 2023.
All three HMI components declined this month. The index of present single-family sales conditions fell 2.6% (+2.8% y/y) to 37 in July, the third m/m fall in four months, after a 5.0% decrease to 38 in June. The index was 40.3% below a high of 62 in July 2023 and 61.5% below a record-high 96 in November 2020. The index of expected single-family sales for the next six months slid 4.4% (0.0% y/y) to 43 in July after being unchanged m/m at 45 in June. The index was 34.8% below a high of 66 in December 2024 and 51.7% below a peak of 89 in November 2020. The index measuring traffic of prospective buyers dropped 8.0% (+15.0% y/y) to 23 in July after holding steady m/m at 25 in June. The index was 42.5% below a high of 40 in July 2023 and 70.1% below a record-high 77 in November 2020. These three HMI components posted their lowest levels since April.
By region, the HMIs were down m/m in the Northeast and West this month, while up in the Midwest and flat in the South. The index for the Northeast plunged 18.0% (-14.6% y/y) to 41 in July, the first m/m decline since April and a three-month low, following a 13.6% advance to 50 in June. The index for the West fell 7.4% (0.0% y/y) to 25, the lowest level since July 2025, after registering at 27 in June and May. In contrast, the index for the Midwest rose 2.2% (7.0% y/y) to 46, the highest level since December, after holding at 45 in June and May. Meanwhile, the index for the South was unchanged at 31 (+6.9% y/y) in July and June following a 5.9% rebound to 36 in May.
The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low". The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. The regional indexes run back to December 2004.
These data are included in Haver's SURVEYS database. The Informa Global Markets survey is in Haver's MMSAMER database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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