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The Composite Housing Market Index from the National Association of Home
Builders' (NAHB) slipped in December to 32 and gave back half of last
month's improvement. The index, therefore, remained down 5.9% in the
fourth quarter versus 3Q and off nearly one half from last year.· During the last twenty years there has been a 76% correlation between the y/y change in the Composite Index and the change in single family housing starts.
· The decline was led by a falloff in the traffic of prospective home buyers which reversed all of the November gain (-42.5% y/y).
· The sub-index for current sales also was unchanged m/m (-48.4% y/y) but the sub-index covering prospective sales in the next six months improved to its highest level since July (-26.2% y/y).
· The housing market index for the Midwest rose sharply (-35.3% y/y) to the highest level since June but that was offset by deterioration in the West (-58.7% y/y).
· The NAHB index is a diffusion index based on a survey of builders. Readings above 50 signal that more builders view conditions good than poor.
· Visit the National Association of Home Builders.