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Economy in Brief


by Robert Brusca NAHB Index Edges Lower as Housing Remains Weak June 18, 2007

The NAHB index continues to fall and its weakness is broad-based (see table below). The accompanying chart shows that periods of extreme weakness in the index do tend to correlate with severe weakness in new home sales. While there is some successful NAHB mapping with intermediate changes in home sales, the tracking of the NAHB with New Home Sales index is less that perfect. Currently the NAHB has risen and dipped while new home sales (which are not as up to date as the NAHB index) are still showing some rebound.

Regional data show that all four major regions are weaker in the recent three months than they have been over the previous six months on average. Moreover all four regions show readings that are in the bottom 15% of their respective ranges or lower since December 2004.

Weakness in the NAHB likely reflects weakness in home sales and starts as well. But it is not clear if this will be ongoing weakness of the same we have had or some further deteriorating. Construction jobs for example made their largest drop FOUR months ago.

National Associaton of Homebuilders Index
  NAHB Index 1Fam Sales 1F:next 6M Traffic North East* Mid West* South* West*
Jun-07 28 29 39 21 35 19 32 27
May-07 30 31 41 22 32 22 33 32
Apr-07 33 33 44 27 38 22 37 35
Mar-07 36 36 50 28 39 27 40 37
Feb-07 39 40 53 29 43 27 44 35
Averages: Momentum
3-month 30.3 31.0 41.3 23.3 35.0 21.0 34.0 31.3
6-month 33.5 34.2 45.8 25.5 37.5 23.5 37.8 33.2
12-month 33.3 34.6 44.6 24.7 36.1 20.7 39.4 36.1
Ranges and Percentiles Since 1985
Percentile 13.8% 14.9% 13.7% 10.9% 15.2% 10.0% 0.0% 0.0%
Max 78 86 83 62 74 55 77 91
Min 20 19 32 16 28 15 32 27
Red indciates drop from previous period. All ranges Since Jan 1985 unelss noted * Since Dec 2004
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