During the last few months of 2025, we focused on articles regarding the state of the housing market, as it is so closely related to our industry. Hopefully, you found these articles informative and helpful when making decisions about buying a home and what to look for.

What Is the Housing Market Index (HMI)?

The Housing Market Index (HMI) was created in 1985 by the NAHB, the National Association of Home Builders. It was designed to help predict periods of booms and busts in the housing market, and it has performed very well over time by consistently reflecting these trends.

The HMI is based on a monthly survey of single-family home builders. Builders are asked three specific questions about market conditions, which are weighted as follows:

  • Present sales of new single-family homes (59 percent)
  • Expected sales of single-family homes over the next six months (14 percent)
  • Traffic of prospective buyers for new single-family homes (27 percent)

The panel of builders surveyed is stratified by region of the country and builder size. This panel is refreshed annually to ensure strong participation and balanced viewpoints.

How the HMI Is Interpreted

An HMI reading of 50 means that half of the builders are optimistic about current and near-term market conditions, while the other half are not. Readings below 50 indicate more pessimism, while higher readings reflect stronger confidence.

The index is influenced by several factors, including interest rates, employment levels, material costs, and inflationary pressures.

A Brief History of the Housing Market Index

1980s: The index remained in a relatively narrow range between 50 and 64 until the late 1980s, when concerns surrounding the Savings and Loan industry emerged.

1990s: These concerns, combined with the recession that followed, caused the HMI to drop to around 20 in the early 1990s. As economic growth returned later in the decade, the index climbed above 70.

2000s: The HMI averaged around 70 through 2005. However, the collapse of the financial markets and the onset of the Great Recession caused housing markets to crash. In 2009, the index reached an all-time low of just 8.

2010s: Conditions were moderately strong throughout the decade, with the HMI generally staying in the high 60s.

2020s: Shortly after the end of Covid-related shutdowns, the index reached an all-time high of 90 in November 2020. Beginning in 2023, the index declined sharply as interest rates increased and affordability worsened.

Where We Stand Today

As of December 2025, the Housing Market Index increased by one point to a reading of 39. While this remains below the neutral level of 50, there are reasons for optimism.

With interest rates declining, inventory levels improving, and home prices stabilizing or beginning to fall in some markets, the HMI is expected to improve throughout 2026.

What This Means for Buyers and Movers

Improving builder confidence often signals better conditions ahead for buyers. As inventory increases and affordability slowly improves, more people may find opportunities to enter the housing market or make long-delayed moves.

At O’Brien’s Moving & Storage, we closely follow these trends because housing activity and moving activity go hand in hand. When confidence returns to the housing market, moves tend to follow.

If you are planning a local, long-distance, or interstate move in 2026, our experienced team is ready to help you navigate the transition smoothly and efficiently.