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Economy in Brief

U.S. Home Builders Index Rebounds, Notably in Northeast
by Tom Moeller  November 18, 2014

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo recovered to 58 this month (7.4% y/y) after an unrevised decline to 54 in October. The figure beat expectations for 55 in the Informa Global Markets Survey.

The index of single-family home sales improved to 62 (6.9% y/y) and made up most of its October decline. The index of expected sales during the next six months also recovered to 66 (10.0% y/y), making up most of its October drop. The NAHB figures are seasonally adjusted.

Realtors reported that their traffic index recovered to 45, up 9.8% y/y.

Housing market activity recovered around the country, notably in the Northeast where the index jumped m/m to its highest level since March 2006. The index reading for the West gained 13.2%. That recovered its October decline but the reading remained 15.5% below its January high. The South's reading improved 3.3% to nearly its highest level since 2006. In the Midwest, the index gained 5.7%, but still was off 12.5% from the high reached three months ago.

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 Nov Oct Sep Nov'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 58 54 59 54 51 34 16
 Single-Family Sales: Present 62 57 63 58 55 36 16
 Single-Family Sales: Next Six Months 66 64 67 60 58 41 22
 Traffic of Prospective Buyers 45 41 47 41 39 27 13
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