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Economy in Brief

U.S. Home Builders Index Revisits July Low
by Tom Moeller  March 16, 2015

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined to 53 in March (+15.2% y/y) from an unrevised 55 in February. It was the lowest figure since July. During the last ten years, there has been an 80% correlation between the y/y change in the home builders index and the y/y change in single-family housing starts. The latest figure fell short of 56, expected in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted.

The index of single-family home sales continued to fall to 58 (+13.7% y/y), its lowest level since August. The index of expected sales during the next six months was unchanged at 59 (11.3% y/y). It was the lowest reading since June.

Realtors reported that their traffic index declined sharply to 37, the lowest level since June. The figure was 15.6% higher than twelve months ago.

Housing market activity was mixed around the country this month. In the Midwest, the reading improved 27.1% (22.0% y/y). In the West, however, the index fell 17.2% (+3.9% y/y) and the index reading in the Northeast declined 15.2% (+30.2% y/y). In the South, it fell 3.6% (+12.5% 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 Mar Feb Jan Mar'14 2014 2013 2012
Composite Housing Market Index, SA (All Good=100) 53 55 57 46 52 51 34
 Single-Family Sales: Present 58 61 62 51 56 55 36
 Single-Family Sales: Next Six Months 59 60 60 53 61 58 41
 Traffic of Prospective Buyers 37 39 44 32 39 39 27
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