NAHB Housing Market Index Pulled Back To April Lows

Key Insights

• NAHB Housing Market Index decreased from 50 in August to 45 in September. 
• U.S. dollar is swinging between gains and losses as traders are cautious ahead of the Fed meeting.
• SP500 moved towards session highs as traders reacted to the report. 

On September 18, the National Association of Home Builders released NAHB Housing Market Index report for September. The report indicated that NAHB Housing Market Index declined from 50 in August to 45 in September, compared to analyst consensus of 50.

The index has reached its lows at 31 in December 2022 and rebounded towards the highs at 56 in July 2023. However, the rebound was stopped, and the index pulled back to the lows that were last seen in April 2023.

The report indicated that higher interest rates continued to put pressure on the housing market activity. The rates on 30-year mortgages have settled above the 7.00% level, which is bearish for the housing market.

FedWatch Tool indicates that there is a 99.0% probability that Fed will leave the federal funds rate unchanged on Wednesday. However, traders believe that there is a 35.4% probability of an additional rate hike by the end of the year.

U.S. dollar is mostly flat against a broad basket of currencies after the release of the report. Traders are not ready for big moves ahead of the Fed meeting.

Gold has recently pulled back below the $1925 level. The weaker-than-expected housing report may provide some support to gold markets, although the Fed meeting will remain the key catalyst for this week.

SP500 moved towards session highs as traders reacted to the report. The problems in the housing market may serve as a bullish catalyst for stocks as the Fed may be less hawkish.

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