Upsurge in NAHB Housing Market Index Coincides with Decline in Mortgage Rates

 NAHB observed that purchasers who were previously unable to afford the market were reconsidering their options.  

Highlights

• The NAHB Housing Market Index increased from 34 in November to 37 in December. 
• Mortgage rates experienced a decrease of approximately 50 basis points within the past month. 
• The average price reduction in December stayed at 6%.  

On December 18, the National Association of Home Builders published its NAHB Housing Market Index report. The report revealed that the NAHB Housing Market Index rose from 34 in November to 37 in December, surpassing the consensus forecast of 36.

Commenting on the report, the National Association of Home Builders mentioned, “With mortgage rates decreasing by approximately 50 basis points over the past month, builders are reporting increased foot traffic as some potential buyers who previously felt unable to afford the market are now reconsidering."

While Treasury yields have increased from recent lows, it is important to highlight the significant improvement compared to October when interest rates were near their peak.

Following the release of the NAHB Housing Market Index report, the U.S. Dollar Index strengthened towards the 102.55 level. The positive developments in the housing market are favorable for the American currency.

Gold prices settled around the $2020 mark as traders awaited further market catalysts. The potential rise in Treasury yields may exert some downward pressure on the gold market today.

The S&P 500 index remained focused on settling above the resistance ranging from 4730 to 4750. Market participants maintain a bullish outlook, anticipating that the Federal Reserve will commence interest rate cuts in the first half of 2024.