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Economy in Brief

U.S. Home Builders Index Continues Its Sharp Improvement
by Tom Moeller  July 16, 2013

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo jumped 6 points to 57 this month following a 7 point advance in June. The latest rise was to the highest level since January 2006 and outpaced expectations for an unchanged 51. The index of single-family home sales increased to 60, the highest since February 2006. The index of sales during the next six months picked up steam and gained to 67, the highest level since October 2005. Also, realtors were busy generating sales. The index of traffic of prospective home buyers surged m/m to 45, its highest level since late 2005.

Improvement in activity occurred most everywhere in the country this month. The index for the West surged to 62 from 50 while the Midwest series jumped to 62 from 55. The figure for the Northeast showed a lesser rise to 41 from 38 while in the South it gained to 54 from 52. 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 Jul Jun May Jul'12 2012 2011 2010
Composite Housing Market Index, SA (All Good=100) 57 51 44 35 34 16 16
 Single-Family Sales 60 55 48 36 36 16 16
 Single-Family Sales: Next Six Months 67 60 52 43 41 22 23
 Traffic of Prospective Buyers 45 40 33 28 27 13 12
Northeast 41 38 40 34 29 17 20
Midwest 62 55 44 33 36 14 14
South 54 52 44 33 34 18 17
West 62 50 41 43 38 15 13
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