NAHB
The National Association of Home Builders (NAHB) Housing Market Index (HMI) serves as a measure of housing market health. It derives from surveys asking builders to evaluate current and future sales conditions for new homes, plus prospective buyer traffic.
Relevance to Recession Prediction
Housing is sensitive to interest rates, so it often turns early. Rising HMI readings suggest builder confidence in market expansion. Falling readings may signal economic slowdown or recession. Since housing activity influences broader economic performance through related spending and investment, HMI shifts receive close monitoring.
Recession Signal Interpretation
An HMI reading below 50 indicates more builders perceive conditions as unfavourable than favourable, suggesting pessimism about housing prospects.