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Economy in Brief

U.S. Home Builders Index Steadies
by Tom Moeller  November 16, 2016

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo held at 63 (1.6% y/y) during November following an unrevised decline from 65 in September. The NAHB figures are seasonally adjusted. During the last ten years, there has been an 72% correlation between the y/y change in the home builders index and the y/y change in housing starts.

The index of present conditions in the housing market held at 69 (+3.0% y/y). The index for the next six months fell to 69, but was unchanged y/y.

Home builders reported that the traffic index rose 2.2% to 47 (-2.1% y/y) and recaptured October's decline.

Amongst the regional indexes, the index for the West increased 2.7% (-1.3% y/y). The Northeast posted a 2.2% increase (-6.0% y/y) to the highest level since January. The index for the Midwest rose 1.7% (-1.7% y/y) to the highest point in six months. For the South, the index held steady (+4.8% 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 Nov Oct Sep Nov'15 2015 2014 2013
Composite Housing Market Index, SA (All Good=100) 63 63 65 62 59 52 51
 Single-Family Sales: Present 69 69 71 67 64 56 55
 Single-Family Sales: Next Six Months 69 71 71 69 66 61 58
 Traffic of Prospective Buyers 47 46 47 48 43 39 39
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