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Economy in Brief

U.S. Home Builder Index Holds Steady
by Tom Moeller  February 15, 2018

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo remained unchanged (+10.8% y/y) at 72 during February. The reading matched expectations in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 65% correlation between the y/y change in the home builders index and the y/y change in housing starts.

The index of present sales conditions in the housing market eased 1.3% (+9.9% y/y) to 78, down for the second straight month. The index for conditions in the next six months rose 2.6% (9.6% y/y) to 80, the highest level since June 2005.

Home builders reported that the traffic of prospective buyers index held steady at 54 (+17.4% y/y), up sharply from 12 averaged in 2010.

Amongst the regional indexes, the index for the Midwest gained 1.4% (9.4% y/y) while the index for the South held steady (+14.1% y/y). The index for the Northeast declined 6.7% (+43.6% y/y) and the reading for the West fell 7.2% (+1.3% 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 '17 2017 2016 2015
Composite Housing Market Index, SA (All Good=100) 72 72 74 65 68 61 59
 Single-Family Sales: Present 78 79 80 71 74 67 64
 Single-Family Sales: Next Six Months 80 78 79 73 76 67 66
 Traffic of Prospective Buyers 54 54 58 46 50 45 43
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