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Economy in Brief

U.S. Home Builders Index Climbs To Six-Month High
by Tom Moeller  August 18, 2014

Activity in the housing garnered strength this summer. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo improved to 55 during August from an unrevised from 53 in July. The latest figure was the highest since January and beat expectations for 53 in the Informa Global Markets Survey. The index of single-family home sales increased to 58, the highest point since January. The index of expected sales during the next six months gained to 65, also the highest level since September. The NAHB figures are seasonally adjusted.

More prospective home-buyers were out looking. Realtors reported that their traffic index of prospective buyers improved to 42, the highest level since December.

Housing market activity was mixed this month around the country. The index reading of activity in the Midwest improved by one-quarter m/m (1.6% y/y) to a new high for the economic recovery. Also strong was the reading for the Northeast which rose 7.9% (5.1% y/y) and recovered July's decline. Falling 3.8% m/m (8.9% y/y) was the reading for South while the West's index backpedaled 1.7% (-3.4% y/y).

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 Aug Jul Jun Aug'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 55 53 49 58 51 34 16
 Single-Family Sales: Present 58 56 53 62 55 36 16
 Single-Family Sales: Next Six Months 65 63 58 68 58 41 22
 Traffic of Prospective Buyers 42 39 36 46 39 27 13
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