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Economy in Brief

U.S. Home Builders Index Slips Again
by Tom Moeller  February 15, 2017

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 3.0% to 65 during February (+12.1% y/y) following an unrevised decline to 67 in January. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 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 fell 1.4% to 71 (+9.2% y/y). The index for conditions in the next six months declined 3.9% to 73 (+14.1% y/y).

Home builders reported that the traffic index declined 9.8% to 46 (+17.9% y/y), the lowest level since July.

Amongst the regional indexes, the index for the Northeast fell 19.6% (-8.9% y/y). For the South, the index declined 5.9% (+12.3% y/y). In the Midwest, the index eased 3.0% (+12.3% y/y). The index for West remained unchanged (+11.9% 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 six 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 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 Feb Jan Dec Feb'16 2016 2015 2014
Composite Housing Market Index, SA (All Good=100) 65 67 69 58 61 59 52
 Single-Family Sales: Present 71 72 75 65 67 64 56
 Single-Family Sales: Next Six Months 73 76 78 64 67 66 61
 Traffic of Prospective Buyers 46 51 52 39 45 43 39
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