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Economy in Brief

U.S. Home Builders Index Rebounds
by Tom Moeller  April 15, 2015

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo recovered to 56 in April (21.7% y/y) following a plunge to 52 in March, revised from 53. It was the highest level since January. 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 exceeded the level of 55 expected in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted.

The index of single-family home sales recovered to 61 (22.0% y/y). The index of expected sales during the next six months jumped to 64 (14.3% y/y), its highest level this year.

Realtors reported that their traffic index bounced up to 41, the highest level in three months. The figure was one-third higher than twelve months ago.

Housing market activity improved in most of the country this month. In the Northeast, the reading recovered most of its March decline with a 16.2% rise (26.5% y/y). In the South, it increased 9.3% (22.9% y/y) and in the West activity rose 3.7% (24.4% y/y). The figure for the Midwest declined 8.3% (+22.2% 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 Apr Mar Feb Apr'14 2014 2013 2012
Composite Housing Market Index, SA (All Good=100) 56 52 55 46 52 51 34
 Single-Family Sales: Present 61 58 61 50 56 55 36
 Single-Family Sales: Next Six Months 64 59 60 56 61 58 41
 Traffic of Prospective Buyers 41 37 39 31 39 39 27
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