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Economy in Brief

U.S. Home Builders Index Dips But Traffic Falls Sharply
by Tom Moeller  January 16, 2014

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo slipped a point to 56 this month but the figure remained near the expansion high. The December figure was revised to 57 from 58 and the latest reading disappointed expectations for 58. The index of single-family home sales fell to 62 from the expansion high. The index of sales during the next six months also slipped to 60 and retraced its December advance. Realtors reported that their traffic index of prospective buyers deteriorated to 40, the lowest level since June.

Activity was mixed around the country. In the South, the index fell sharply and retraced all of its December gain while the figure for the Midwest dipped. Activity in the West surged to the expansion high and it rose modestly in the Northeast. The NAHB figures are seasonally adjusted. The index for the Northeast rose to 42 after a sharp November decrease.

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.

National Association of Home Builders Jan Dec Nov Jan'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 56 57 54 47 51 34 16
 Single-Family Sales: Present 62 63 58 52 55 36 16
 Single-Family Sales: Next Six Months 60 62 60 49 58 41 22
 Traffic of Prospective Buyers 40 43 41 36 39 27 13
Northeast 42 40 44 36 38 29 17
Midwest 60 61 54 46 54 36 14
South 53 60 55 51 51 34 18
West 71 61 58 59 56 38 15
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