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Economy in Brief

U.S. Home Builders Index Shows Stability
by Tom Moeller  March 17, 2014

Following a record 10 point decline under heavy snowfall, the Composite Housing Market Index from the National Association of Home Builders-Wells Fargo edged up 1 point this month to 47. The index now stands 6.8% above March of 2013. The latest reading disappointed consensus expectations for a larger rise to 48. The index of single-family home sales improved 1 point to 52, but still was 11 points lower than the December peak. The index of expected sales during the next six months edged 1 point lower to 53, off 15 points from the August peak. The NAHB figures are seasonally adjusted.

Realtors reported that their traffic index of prospective buyers recovered 2 points to 33, but remained sharply below the peak reading of 46, six months ago.

The index reading of activity in the Midwest showed a 3 point recovery after its 10 point February decline. The index for the South also gained 2 points. Continuing lower was the reading in the Northeast to the lowest level since August 2012. Also down was the figure for the West which fell to the lowest level in 9 months.

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 Mar Feb Jan Mar'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 47 46 56 44 51 34 16
 Single-Family Sales: Present 52 51 62 47 55 36 16
 Single-Family Sales: Next Six Months 53 54 60 50 58 41 22
 Traffic of Prospective Buyers 33 31 40 34 39 27 13
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