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Economy in Brief

U.S. Home Builders Index Falls Again
by Tom Moeller  December 15, 2015

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 1.6% to 61 during December after falling 4.6% in November. It was the lowest level in three months and the figure fell short of expectations for 63 in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. 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 index of single-family home sales fell 1.5% (+6.5% y/y) to 66. Similarly, the index of expected sales during the next six months declined 2.9% (+4.7% y/y) to 67.

Home builders reported that their traffic index fell 4.2% to 46, the lowest level since August.

The housing market index decline reflected declines through most of the country. In the Midwest, the homebuilders index declined 8.3% (+1.9% y/y) to the lowest level since May and for the Northeast it eased 2.0% (+6.5% y/y). In the West, the index fell 1.3% (+2.7% y/y) and reversed the November gain but in the South it remained unchanged (6.9% 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 Dec Nov Oct Dec'14 2015 2014 2013
Composite Housing Market Index, SA (All Good=100) 61 62 65 58 59 52 51
 Single-Family Sales: Present 66 67 70 62 64 56 55
 Single-Family Sales: Next Six Months 67 69 75 64 66 61 58
 Traffic of Prospective Buyers 46 48 47 46 43 39 39
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