The NAHB Housing Market Index retreated to levels last seen in April.

Key Insights

1. The NAHB Housing Market Index dropped from 50 in August to 45 in September.
2. The U.S. dollar is fluctuating between positive and negative territory as traders exercise caution before the Fed meeting.
3. The S&P 500 approached its highest levels of the trading session as traders responded to the report.

On September 18, the National Association of Home Builders published the NAHB Housing Market Index report for September. The report revealed a decrease in the NAHB Housing Market Index from 50 in August to 45 in September, falling short of the analyst consensus of 50.

This index had dropped to its lowest point at 31 in December 2022 but then rebounded to reach a high of 56 in July 2023. However, this rebound was halted, and the index retreated to the lows last observed in April 2023.

The report noted that the housing market activity continued to face pressure from higher interest rates. The rates for 30-year mortgages have remained above the 7.00% threshold, which has a negative impact on the housing market.

The FedWatch Tool indicates a 99.0% likelihood that the Fed will maintain the federal funds rate at the upcoming meeting. However, traders perceive a 35.4% chance of an additional rate hike by the year's end.

Following the report's release, the U.S. dollar showed minimal movement against a range of currencies, as traders opted for caution before the Fed meeting.

Gold recently dipped below the $1925 mark. Although the weaker housing report could offer some support to gold markets, the key factor for this week remains the outcome of the Fed meeting.

The S&P 500 advanced towards its highest levels of the trading session as traders responded to the report. The housing market challenges might act as a positive driver for stocks, as the Fed could potentially adopt a less hawkish stance.