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Economy in Brief

NAHB Housing Market Index Ticked Up
by Tom Moeller October 17, 2006

The National Association of Home Builders' (NAHB) October Composite Housing Market Index rose to 31 from 30 in September. It was the first m/m increase since last year. Regardless, the latest level remained down by more than one half from the levels of 2005.

During the last twenty years there has been a 75% correlation between the y/y change in the Composite Index and the change in single family housing starts.

The improvement was led a sharp gain in the sub-index covering prospective sales in the next six months (10.8% m/m, -43.8% y/y). The sub-index for current sales was unchanged m/m (-56.8% y/y).

Traffic of prospective home buyers rose modestly from the extremely low levels of the prior two months.

Only the housing market indexes for the Northeast (-50.7% y/y) and the Midwest (-55.6% y/y) improved m/m. In the South the index fell (-51.3%) as it did out West (-64.8% 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.

Nat'l Association of Home Builders October September Oct. '05 2005 2004 2003
Composite Housing Market Index 31 30 68 67 68 64
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