The analysis of the Impact of Economic Market Conditions on the Housing Market Index (HMI): A Study of Forecasting Market Trends
Abstract (300 words maximum)
The analysis of the Impact of Economic Market Conditions on the Housing Market Index (HMI): A Study of Forecasting Market Trends
Abstract:
The NAHB/Wells Fargo Housing Market Index (HMI) is a vital tool for measuring builder confidence in the US single-family housing market. This index, derived from a monthly survey of home builders, provides insight into current market circumstances and future predictions. The HMI is critical for stakeholders in the construction sector, influencing policy, lending practices, and strategic planning. The housing market is currently undergoing significant fluctuations because of economic uncertainty, especially the impact of recent recessions. Understanding these variations is critical for forecasting market trends and making informed decisions.
The objective of this analysis is to investigate the variations in the HMI during recession periods and measure the impact of external factors on the HMI using regression analysis and machine learning techniques. This study collected HMI between 1985 and 2024 along with relevant external market conditions to analyze these relationships comprehensively,
This study found that interest rates, employment levels, and builder confidence levels have a critical impact on the HMI. In addition, the results showed that there is a significant downward trend of the HMI during the recession.
Understanding the relationship between builder sentiment and economic conditions allows stakeholders such as home builders, policymakers, financial institutions, and investors to better foresee market changes and alter their strategies accordingly.
Academic department under which the project should be listed
CACM - Construction Management
Primary Investigator (PI) Name
Minsoo Baek
The analysis of the Impact of Economic Market Conditions on the Housing Market Index (HMI): A Study of Forecasting Market Trends
The analysis of the Impact of Economic Market Conditions on the Housing Market Index (HMI): A Study of Forecasting Market Trends
Abstract:
The NAHB/Wells Fargo Housing Market Index (HMI) is a vital tool for measuring builder confidence in the US single-family housing market. This index, derived from a monthly survey of home builders, provides insight into current market circumstances and future predictions. The HMI is critical for stakeholders in the construction sector, influencing policy, lending practices, and strategic planning. The housing market is currently undergoing significant fluctuations because of economic uncertainty, especially the impact of recent recessions. Understanding these variations is critical for forecasting market trends and making informed decisions.
The objective of this analysis is to investigate the variations in the HMI during recession periods and measure the impact of external factors on the HMI using regression analysis and machine learning techniques. This study collected HMI between 1985 and 2024 along with relevant external market conditions to analyze these relationships comprehensively,
This study found that interest rates, employment levels, and builder confidence levels have a critical impact on the HMI. In addition, the results showed that there is a significant downward trend of the HMI during the recession.
Understanding the relationship between builder sentiment and economic conditions allows stakeholders such as home builders, policymakers, financial institutions, and investors to better foresee market changes and alter their strategies accordingly.