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Economy in Brief

U.S. Home Builders Index Is Steady Following Sharp October Decline
by Tom Moeller  November 18, 2013

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo was unchanged at 54 this month after a 3 point decline in October, last month reported as a 2 point dip. This latest figure was weaker than expectations for a drop to 55, yet remained up 20% y/y. The index of single-family home sales held at 58, the lowest reading since June. The index of sales during the next six months slipped to 60. Realtors reported that their traffic index of prospective buyers weakened to its lowest level since June.

Activity was mixed around the country. The index for the Northeast increased to 44 after a sharp October decline. In the South, the index recovered just a piece of its sharp October drop. The figure for the Midwest declined 8 points following a downwardly revised October slip. Activity in the West slipped after a drop in the October index to 59. 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 expectations figure is available in Haver's MMSAMER database.

GDPplus, from the Federal Reserve Bank of Philadelphia, is a measure of the quarter-over-quarter rate of growth of real GDP in annualized percentage points. It improves on the BEA's expenditure- and income-side measures. The Bank's write-up of the new measure is available here.

National Association of Home Builders Nov Oct Sep Nov'12 2012 2011 2010
Composite Housing Market Index, SA (All Good=100) 54 54 57 45 34 16 16
 Single-Family Sales: Present 58 58 60 49 36 16 16
 Single-Family Sales: Next Six Months 60 61 64 52 41 22 23
 Traffic of Prospective Buyers 42 43 46 35 27 13 12
Northeast 44 30 44 30 29 17 20
Midwest 54 62 63 51 36 14 14
South 55 54 58 49 34 18 17
West 58 59 63 48 38 15 13
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