• Housing market activity continues to strengthen.

• Improvement remains broad-based regionally.

• Number of prospective buyers reaches new record.

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo increased to a record 83 during September. Stability with August's 78 had been expected in the INFORMA Global Markets survey. The NAHB figures are seasonally adjusted. Over the past 15 years, there has been a 72% correlation between the y/y change in the home builders index and the y/y change in new plus existing home sales. The figures date back to January 1985.

The index of present sales conditions rose to 88 in September and set a new record high. The index of expected conditions in the next six months rose to a record 84. The index measuring traffic of prospective buyers also jumped m/m to a record (by far) of 73.

Regional readings all remained strong. The index for the Northeast strengthened to a record high of 81, up from the recession low of 17 in May. The index for the South also improved to a record high of 85. The index for the Midwest jumped to a new record of 78, up from 25 in April. The index for the West eased marginally to 87, but remained nearly a record high. These regional readings date back only to December 2004.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. These data are included in Haver's SURVEYS database.