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Economy in Brief

U.S. Home Builders Index Recovers After Its April Swoon
by Tom Moeller  May 15, 2013

New home builders breathed easier as construction activity recovered this month. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo jumped to 44 in May following a downwardly revised April reading of 41. Expectations were for an index reading of 43. Despite the latest recovery, the index level remained down 6.4% versus its winter peak. The index of single-family home sales increased to 48 while the index of sales during the next six months rose more moderately to 53. The home builders index of traffic of prospective home buyers also recovered m/m to 33, but that remained off versus its earlier high.

Monthly improvement occurred throughout most of the country in May. The index for the Northeast returned to the series' high. In addition, the indexes for the Midwest and the South recovered after the April declines. Working the other way, the index for the West fell to the lowest level in nine months. The NAHB figures are seasonally adjusted.

The NAHB has compiled the Housing Market Index since 1985. It reflects 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 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 are included in Haver's SURVEYS database. The expectation figure is available in Haver's MMSAMER database. 

The Impact of Housing Markets on Consumer Debt: Credit Report Evidence from 1999 to 2012 from the Federal Reserve Bank of New York can be found here.

National Association of Home Builders May Apr Mar May'12 2012 2011 2010
Composite Housing Market Index, SA (All Good=100) 44 41 44 28 34 16 16
 Single-Family Sales 48 44 47 30 36 16 16
 Single-Family Sales: Next Six Months 53 52 50 34 41 22 23
 Traffic of Prospective Buyers 33 30 34 23 27 13 12
Northeast 41 31 38 31 29 17 20
Midwest 45 40 49 26 36 14 14
South 44 40 42 28 34 18 17
West 41 52 55 29 38 15 13
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