Builder confidence received a slight boost in July with the passage of the One Big Beautiful Bill Act but remained near its lowest level in over 2.5 years. The National Association of Home Builders (NAHB) Housing Market Index (HMI) inched up to 33 this month, up 1 point from June. This marks the fourth lowest level for the index since 2012 with December 2022 (31), April 2020 (30), and June 2025 (32) being the only lower readings since then. The latest reading was consistent with the forecast
The National Association of Home Builders Housing Market Index is a gauge of builder opinion on the relative level of current and future single-family home sales. The data is collected from a monthly survey of about 900 home builders asking respondents to, "rate market conditions for the sale of new homes at the present time and in the next six months as well as the traffic of prospective buyers of new homes." It is a diffusion index, which means that a reading above 50 indicates a favorable outlook on home sales; below 50 indicates a negative outlook.
Here are a few quotes from the press release:
“The passage of the One Big Beautiful Bill Act provided a number of important wins for households, home builders and small businesses,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, N.C. “While this new law should provide economic momentum after a disappointing spring, the housing sector has weakened in 2025 due to poor affordability conditions, particularly from elevated interest rates.”
“Single-family housing starts will post a decline in 2025 due to ongoing housing affordability challenges,” said NAHB Chief Economist Robert Dietz. “Single-family permits are down 6% on a year-to-date basis and builder traffic in the HMI is at a more than two-year low.”
Here is the historical series, which dates from 1985.
Components of the the NAHB Housing Market Index
The NAHB Housing Market Index is calculated based off of three components: current sales, expected sales in the next six months, and traffic of prospective buyers.
Housing Market Index: Regional Breakdown
The chart below gives a regional breakdown of the NAHB HMI in four regions of the country: Northeast, Midwest, South, and West.
