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Economy in Brief

U.S. Home Builders Index Notches Higher
by Tom Moeller  October 16, 2012

The Composite Housing Market Index from the National Association of Home Builders/Wells Fargo rose this month to 41 from 40 in September. The latest figure was the highest since June 2006. The index of single-family home sales held steady at 42, also the highest since 2006 but still down from levels near 70 in 2004. The index of sales during the next six months held at an elevated 51. Finally, the home builders' index of traffic of prospective buyers improved further to 35, its highest since April 2006. By region, the index for the West was the strongest and jumped to 49. That was followed by the South with a rise to 42, its highest in eight years. The Northeast's index gained for the second month in the last three. To the downside, the index for the Midwest retraced its September gain. 

The index of prospective new home buyer traffic surged to 35, its highest level since April 2006. Each of these NAHB figures is seasonally adjusted. The Home Builders' Housing Opportunity Index, which is the share of homes sold that could be considered affordable to a family earning the median income, fell in Q2'12 and reversed six months of improvement. (There is a break in the series from 2002 to 2003.)

The Home Builders index is compiled from survey questions asking builders to rate market conditions as "good," "fair," "poor" or "very high" to "very low." The figure is thus a diffusion index with numerical results over 50 indicating a predominance of "good" readings.

The NAHB has compiled the Housing Market Index since 1985. The weights assigned to the individual index components are .5920 for single family detached sales, present-time, .1358 for single family detached sales, next six months; and .2722 for traffic of prospective buyers. The results, along with other housing and remodeling indexes from NAHB Economics, are included in Haver's SURVEYS database. The expectation figure is available in Haver's MMSAMER database.

 

National Association of Home Builders Oct Sep Jul Oct'11 2011 2010 2009
Composite Housing Market Index, SA (All Good=100) 41 40 37 17 16 16 15
 Single-Family Sales 42 42 38 17 16 16 13
 Single-Family Sales: Next Six Months 51 51 43 23 22 23 24
 Traffic of Prospective Buyers  35 30 30 14 13 12 13
Northeast 34 31 23 14 17 20 17
Midwest 41 45 41 15 14 14 13
South 42 39 35 19 18 17 16
West 49 44 40 21 15 13 12
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