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Economy in Brief

U.S. Home Builders Index Holds At A Six-Year High
by Tom Moeller  January 16, 2013

Since 2006, sales conditions in the housing market haven't been this good. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo held at 47, the highest level since April 2006. The index of single-family home sales gained to 51, also the highest since 2006. The index of sales during the next six months slipped to a still-strong 49. Finally, the home builders' index of traffic ticked up to 37, its highest since April 2006. For the year, the traffic index roughly doubled.

By region, the index for the West jumped to 59 last month while the index for the South also rose to 50. In the Northeast the index fell to 36 and the index for the Midwest fell to 46. 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, rose slightly in Q3'12 to 74.1% but remained down from the series' high. (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 Jan Dec Nov Jan'12 2012 2011 2010
Composite Housing Market Index, SA (All Good=100) 47 47 45 25 34 16 16
 Single-Family Sales 51 51 49 25 36 16 16
 Single-Family Sales: Next Six Months 49 50 52 29 41 22 23
 Traffic of Prospective Buyers 37 36 35 21 27 13 12
Northeast 36 41 30 23 29 17 20
Midwest 46 52 51 24 36 14 14
South 50 47 49 28 34 18 17
West 59 45 48 21 38 15 13
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