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Economy in Brief

U.S. Home Builders Index Recovers to Five-Month High
by Tom Moeller  June 16, 2014

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo improved to 49 this month from an unrevised from 45 in May. The latest figure was the highest since January and beat consensus expectations for a reading of 47. The index of single-family home sales increased to 54 and the index of expected sales during the next six months improved to 59. Both were the highest levels since January. The NAHB figures are seasonally adjusted.

Realtors reported that their traffic index of prospective buyers improved to 36, the highest level since January.

The index reading of activity in the West led this month's improvement. It jumped nine points to the highest level since February. The reading for the South gained five points to the highest level since January. The figure for the Midwest improved four points to the highest level since March but the reading for the Northeast retraced much of its recent improvement.

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 Jun May Apr Jun'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 49 45 46 51 51 34 16
 Single-Family Sales: Present 54 48 50 55 55 36 16
 Single-Family Sales: Next Six Months 59 56 56 60 58 41 22
 Traffic of Prospective Buyers 36 33 31 40 39 27 13
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