The National Association of Home Builders (NAHB) Housing Market Index (HMI) ticked slightly higher to 65 in July, a solid reading that met the consensus forecast.
|Indicator||Prior||Consensus Forecast||Forecast Range||Result|
|Housing Market Index||64||65||64 to 66||65|
Methodology for HMI
The HMI is a weighted average of separate diffusion indices for these three key single-family series. The first two series are rated on a scale of Good, Fair and Poor and the last is rated on a scale of High/Very High, Average, and Low/Very Low.
A diffusion index is calculated for each series by applying the formula “(Good-Poor+100)/2” to the present and future sales series and “(High/Very High – Low/Very Low + 100)/2” to the traffic series. Each resulting index is then seasonally adjusted and weighted to produce the HMI.
Based on this calculation, the HMI can range between 0 and 100.