Homebuilder confidence is lowest level in seven months.
The NAHB/Wells Fargo Housing Market Index (HMI) dropped again in march.
NAHB Key Findings March 2025
- Current sales conditions fell three points to 43.
- Sales expectations in the next six months held steady at 47.
- Traffic of prospective buyers dropped five points to 24.
- 29% of builders cut home prices in March, up from 26% in February.
- The average price reduction was 5% in March, the same rate as the previous month.
- The use of sales incentives was 59% in March, unchanged from February.
Sales incentives and price cuts are having little positive impact on traffic or purchases.
HMI Methodology
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:
- .5920 for Present Sales
- .1358 for Expected Sales
- .2722 for Buyer Traffic
NAHB Wells Fargo Housing Market Index
Traffic, the index, and present conditions are all at dismal levels historically speaking.
Related Posts
January 24, 2025: For the Full Year, 2024 Existing-Home Sales Lowest in Nearly 30 Years
2024 was a terrible year for Realtors. Will 2025 be any better?
February 21, 2025: Existing-Home Sales Drop 4.9 Percent in January, More Than Expected
After three months of increases, sale took a big dive in January.
March 15, 2025: The Case-Shiller Home Price Index Hits Another New Record High, Thank the Fed
I have not commented on Case-Shiller for a while. Here is a batch of new charts.
Prices are high but few are buying.
Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed
On February 3, I commented Fedthink! The Fed Is Incompetent by Design and Can’t Be Fixed
The Fed destroyed liquidity in the housing market with massive QE that allowed existing owners to refinance at cheap rates fueling inflation via permanent lower mortgage rate (extra money in pockets), while screwing all potential new buyers with runaway prices and higher mortgage rates.
The depth and duration of foot traffic contraction indicates a recession should have started by now.
So, a guy from a homebuilding family fortune will head the GSEs, I’m told. And Trump said he will “liberate” the forests. And federal lands will be opened to homebuilding (I guess not too far from drill baby drill zones — as the EPA is gutted). My conjecture is, the Trump Group (public-private-crony) will leverage our larger financial system to finance “buyers” of all this. This is starting to make me think of an industrial policy like MBS’s — yeah the Saudi guy, with the zillion mile long high rise vanity project in the desert. And desert we will get plenty of here too, financial as well as ecological. But never fear, the capital will be extracted to safe private bunkers somewhere. On Mars?
It takes years to get land ready so anyone rushing in to buy stuff may be disappointed when a democrat gets elected president and rescinds everything just like that pipeline.
Who is willing to take the risk? This is a recipe for a ton of bagholders.
Latest stats have folks cutting down restaurant eating, so I’ve got to think house buying figures in there. Many must be waiting out interest rates, or high asking prices. Sooner or later a need or desire to liquidate some housing will reassert itself, probably at a lower price, to clear. But will the mass buyer be financially fit for it? I.e., how much later/lower would this point arrive?
It’s quite obvious the US economy is headed towards rubble – the Fed could print their way out of a short term problem, but Trump has 4 years to incompetently wreck everything. How low can we go?
I have a high level of confidence in his ability to generate chaos and needless value destruction, this time around. I’m NOT saying the political alternative was/is sustainable. I have a lapse in faith for both models.
My sister is a realtor. No traffic whatsoever for her company in Olympia Washington.
She is essentially on vacation at this point.
Times were very good in 2021/2022/2023 however.
“SOLD BEFORE PROCESSING!”
“MULTIPLE OFFERS RECEIVED!!! BEST AND FINAL DUE 5 PM!!!”
America didn’t want a juggernaut economy so they elected a buffoon. Enjoy the very long vacation, will probably last 4 years.
You’re not counting the last 3 years with out of control inflation and supply shortages? Try to hide your 1 way loyalty better than this, although Democrats appreciate your kind of blind support no matter what.
Lol. Just wait for the next 3 years….
According to Bloomberg, US industrial production jumped to an all-time record high in Feb.
Those dastardly tariffs starting to take hold no doubt.
Prorating the federal deficits over the entire spectrum of federal expenditures, it can be said that virtually all of the current deficits are attributable to defense spending, military and civil service pensions, interest on the debt, and welfare and unemployment benefits.
With the Federal debt now approaching 36.7 trillion combined with the increased annual interest burden and current and prospective deficits, it should be obvious, if the debt is not to be repudiated and all dollar obligations consequently made worthless – the deficits must be markedly reduced.
The constitution forbids repudiation of the debt. All deficit spending ends up as excess money in the banking system. That same money is simply traded for T-Bills and bonds in order to get interest. In fact, if no one else will buy treasuries the primary dealer banks are obligated to do so. This system has been in place since the Great Depression and works well. Repudiation is impossible. A lack of customers for US debt is impossible. What is possible is inflation.
There will come a time (unpredictable) when it will be impossible for the government (federal) to collect enough in taxes (or debt monetization), to pay all of its expenses, including interest on the national debt.
The Gov’t can, of course, borrow an indefinite amount through the Fed. (concealed green backing) given a few changes in existing law. But that would lead to hyperinflation – i.e., a collapse in the credit of the Gov’t.
So the easy way is the way the French did it in 1960. Simply say that beginning Jan 1 (or any other date), new dollars will be issued, and that each new dollar is worth 100 old dollars. Then follow that up with a largely state-controlled economy.
In 1960, the French economist / mathematician Jacques Rueff, during Charles de Gaulle’s presidency, converted the old franc, to a nouveau franc, equal to 100 of the old franc. However, even with this substitution, inflation continued to erode the currency’s value, though at lower rates of change, in comparison to other countries. And this new franc equaled 20 cents to a U.S. dollar. The old rate was 5.00 to a dollar.
In 1960, the French franc, which was one of the weakest currencies, overnight, became one of the strongest. Correcting policies included plans to 1) balance the budget, 2) stabilize the currency, and 3) eliminate currency controls.
The gold content of the franc increased 100%, & 1) foreign exchange rates, and 2) France’s internal prices, reflected the conversion overnight. Internally, prices dropped about 90 percent, and the foreign exchange value rose from about 0.238 cents per franc, to about 20.389 cents per franc.
Domestically, France was on a managed paper standard; externally, on a modified gold bullion standard. With the new policies, France’s economy strengthened, and the franc became fully convertible @ approximately its gold par, into gold for foreign exchange and into foreign currencies.
With the introduction of the Euro, the franc in Jan. 1, 1999, was worth less than 1/8 of its Jan. 1, 1960 value.
From the 1940’s to the 1970’s, the savings and loan associations, credit unions, and mutual savings banks grew faster than the commercial banks. It was “A Wonderful Life”. Then the porches in the front were replaced by the decks in the back yard.
It was a turning point. Then the DIDMCA of March 31st, 1980, turned these thrifts into banks. But banks don’t loan out existing deposits. This shifted the funding of housing from the small saver to the bond backed markets dominated by the GSEs (originate to distribute became the norm).
Will this be fixed? Absolutely not! Powell and economists like George Selgin think banks are intermediaries, serving to match savers with borrowers:
Powell: “When times are good in the economy, banks and other lenders tend to have a lot of money to LEND. And in case you didn’t realize, banks are in the business of making money off of loans. So if they can LEND to more people who they believe will pay them back on time, they’ll make more money.
But right now it’s costing banks more to get the funds they need to make loans. Part of that goes back to the Fed’s interest rate hikes. But the other part comes from the recent bank failures. Since many depositors withdrew money from mid-size and regional banks, these banks have less money to LEND.”
The economy was run in reverse until Powell’s QE. Then there was a shift among deposit classifications. Shadow stats said this was a “flight to liquidity”. It doubled the ratio of DDs, transaction accounts, to TDs savings/investment type accounts. This raised the transaction’s velocity of circulation, driving AD, money times velocity, higher for longer. That has prevented a recession in the meantime. Vt is now decelerating threatening a recession.
See H.8
Nov. -7.8 Dec. -4.8 Jan. -12.5 Feb. 1.6
Deceleration in large CDs (a proxy for Vt)
Understand what is going on. Fed and Treasury officials historically have ALWAYS bent over backwards to reassure investors even as they labor behind the scenes to tackle looming issues. They never never never talk up the prospect of a crisis. This is Bessant acting at the front man to justify DOGE wreckage of many institutions and programs….with no meaningful impact on the deficit, among other reasons because the savings claimed are gross fabrications. Bessant’s noise-making is to justify going after Social Security and Medicare. https://www.cnbc.com/2025/03/16/treasury-secretary-bessent-says-white-house-is-heading-off-financial-crisis.html
The healthcare/health insurance racket is a parasite on American society, with its fake bills, monopolies and collusion. If it can’t be radically reformed and is replaced by Single Payer, they’ll have no one but themselves to blame.
You socialist with your Single Payer, ha ha
I want my “own insurance” even though I don’t get to write the policy language myself, or cross out objectionable contract terms, or make direct deals with every doctor and lab, or understand the medical technology and medicine and body physiology myself, etc.
Why is it that 90 percent of the residents of Canada favor their government run health system over what we have in the US. (Its not perfect, and one can find lots of anecdotes of people having to wait for care, but these problems are limited and should be fixable). Most of the countries with govt run health care systems get better care for far less money.
Any attempt to have a govt run health care system in this country, however, simply gets termed “SOCIALISM”, so nothing happens the corruption continues.
We Americans don’t have that stupid extra bone in our hands that Canadians have. It makes us love giving way more money than necessary to monopolies and con artists! Oh, and you can call anything socialist and we will instantly hate it! Not sure why…
SS line 120 minutes long, then they say call back.
Record number of Americans working more than one jobhttps://thehill.com/business/5199261-americans-working-second-job-labor-statistics/
And the Bidan regime continued the destruction through policies that paid mortgages, delayed foreclosures, extended loan terms, gave out millions in PPP that was used by investors to gobble up property at inflated prices.
Just as it was in the last debacle in 2008, tge FED is the primary culprit. But they have had plenty of help.
This is the scam/story of the decade and every young person who got screwed by it (and continues to get screwed by it) should be past the pitchfork and torches stage mentally.
It’s exactly why Republicans Won in Epic fashion! People are awake now, but definitely Not Woke any longer. All is Good, and getting Better each and every single day!
Are you kidding? At what point will you throw in the towel and realize that Trump has no clue about anything other than (masterfully) getting people outraged about some stupid Woke issue and a crime committed by an immigrant. As per the economy: please read Mish’s analysis of Trump’s confusion about the effect of tariffs while trying to cut the deficit and have a strong dollar besides. Sheer ignorance
Probably not the Fed per se, though. Although they did create the current stalemate by slamming interest rates down to zero for no reason at all and then waiting way too long to fix that “mistake”. Otherwise, this was mostly Democrats wanting to keep things rosy until after November, then dump the default wave on the next guy if they lost.
I agree that interest rates were the Feds biggest gift to this absolute financial calamity, but the root problem was as you point out, the overall actions undertaken by the Harris / Biden Administration. As we claw back money, and cancel these programs, and start getting our financial house in order, we will continue to see progress in the correct direction IMO. People need to be patient however, as it took years to create this mess, and you don’t fix that overnight…
Really, the problem started when Bush 2 was elected. The budget was almost balanced before he took office. Immediate tax cuts, stopping oversight of the banks and lending standards (leading to the 2009 crisis), and unnecessary wars in Iraq and elsewhere ( 7 trillion and counting?), and you had a trillion dollar fiscal deficit in 2008, with limited improvement since. The Fed took over making stupid choices after that (endless QE to prop up the real estate market, lowering interest rates during Covid, etc.) We are screwed.
You meant to write “Cheney”, of “deficits don’t matter” fame.
Well, now they do.
Bush Jr. was almost Bidenesque in his follies.
The federal budget appeared to be balanced due to a small housing bubble combined with the widespread distribution and financialization of the WWW (leading to the first tech stock mania) and, most importantly, the boomer generation was at peak earning (meaning peak S.S. taxes relative to outlays).
There wasn’t any long-term fiscal solvency, it was just a moment in time when things lined up to briefly put the country in the black.
Um, that all started under Trump during COVID. So it is actually a good thing!
You cannot possibly be that blind or clueless to not see or understand the difference. Trump left office during the peak of Pandemic uncertainty. Whatever dumb policies he enacted then can be criticized but can also be forgiven due to the unique circumstances. But the Pandemic was effectively over by 2021 and Biden kept his foot on the stimulus pedal, completely unnecessarily, for all four years, and he wanted more.