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Economy in Brief

U.S. Home Builders Index Surges To Highest Level Since 2006
by Tom Moeller  June 17, 2013

Improvement in the housing market is gaining momentum. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo improved greatly to 52 in June from an unrevised May reading of 44. Expectations were for an unchanged 44. The index of single-family home sales increased to 56. The index of sales during the next six months picked up steam and gained to 61. Each of these levels is the highest since March 2006. Also, realtors were busy attempting to generate sales. The index of traffic of prospective home buyers jumped m/m to 40, its highest level since January 2006.

Improvement in activity occurred most everywhere in the country this month. The index for the Midwest jumped to 57 from 44 while the figure for the South gained to 53 from 44. The figure for the West also recovered to 50 after a decline in May to 41. In the Northeast, however, the index level slipped to 39 and remained down from the December high of 41. 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.

National Association of Home Builders Jun May Apr Jun'12 2012 2011 2010
Composite Housing Market Index, SA (All Good=100) 52 44 41 29 34 16 16
 Single-Family Sales 56 48 44 31 36 16 16
 Single-Family Sales: Next Six Months 61 52 52 33 41 22 23
 Traffic of Prospective Buyers 40 33 30 23 27 13 12
Northeast 39 40 31 28 29 17 20
Midwest 57 44 40 31 36 14 14
South 53 44 40 27 34 18 17
West 50 41 52 32 38 15 13
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