The Freddie Mac average 30-year mortgage rate peaked at 7.62 percent in October of 2023. The NAHB traffic index was 26.
The traffic index is now 25 despite builder incentives and a 1.32 percentage point drop in mortgage rates.
NAHB Wells Fargo Housing Market Index
Please consider the NAHB/Wells Fargo Housing Market Index (HMI) for October 2025.
Each month, the HMI depicts overall builder sentiment toward housing market conditions on a scale ranging between 0 and 100. A higher reading (>50) is an indication that the majority of builders feel confident about the current and near-term outlook for housing. Lower readings signify less optimism among builders.
HMI Key Findings: October 2025
Current sales conditions increased four points to 38.
Sales expectations in the next six months jumped nine points to 54.
Traffic of prospective buyers posted a four-point gain to 25.
Incentives
38% of builders reported cutting prices in October. This share has alternated between 37% and 39% since June.
The average price reduction rose to 6% in October after averaging 5% for several months previously. The last time builders reduced prices by 6% was a year ago in October 2024.
The use of sales incentives was 65% in October, unchanged from September.
Builders are more optimistic as the expectations index jumped 9 points to 54. I suspect falling mortgage rates are in play. But traffic is still dismal and present conditions are near the bottom of the recent range.
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At the annual Jackson Hole meeting this year Powell Admits Prior Monetary Framework Was Hugely Flawed
The Fed just announced a new monetary framework. Is it any better?
The short answer is the new framework is nearly as flawed as before, and the Fed still holds many disproved economic theories.
The Fed helped destroy the housing market. See above for details.
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