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Economy in Brief
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Goods Trade Deficit Widened Slightly in January
The advance estimate of the U.S. trade deficit in goods widened slightly to $83.74 billion in January..
Japan's Industrial Sector Mounts a Comeback
Japan's IP surged in January gaining 4.3% compared to December...
Aircraft Orders Boost U.S. Durable Goods Orders in January
Manufacturers' orders for durable goods increased a much larger-than-expected 3.4% m/m (4.5% y/y) in January...
Kansas City Fed Manufacturing Index Increases Again in February
The Kansas City Fed reported that its manufacturing sector business activity index rose to 24 in February...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Sandy Batten January 20, 2021
• Housing market activity weakens again from record high in November.
• Activity in each region declines.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 3.5% m/m (+10.7% y/y) in January, its second consecutive monthly decline after having risen to a record 90 in November. The January decline compared to expectations for an unchanged reading of 86 in the INFORMA Global Markets survey. The NAHB figures are seasonally adjusted. Over the past 15 years, there has been a 70% correlation between the y/y change in the home builders index and the y/y change in new plus existing home sales.
Each of the composite index's three components declined in January. The index of present sales conditions fell 2.2% to 90 in January but was up 11.1% from a year ago. The index of expected sales six months ahead fell 2.4% m/m to 83 but was 3.8% higher y/y. The index measuring traffic of prospective buyers slid 6.8% m/m (+17.2% y/y) to 68. The November readings had been record highs for each of the three components.
The regional indexes also decline in January in each region. The index for the Northeast slumped 12.8% m/m (+9.7%), its third monthly decline after having reached a record high of 87 in October. The index for the Midwest edged down 1.2% m/m (+20.9% y/y). The index for the South declined 5.7% m/m (+6.5% y/y). And the index for the West fell 4.2% m/m (+7.0% y/y). The January declines for the Midwest, South and West indexes were the second consecutive monthly falls after each had reached a record high in November. These regional series begin in 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.
National Association of Home Builders | Jan | Dec | Nov | Jan'20 | 2020 | 2019 | 2018 |
---|---|---|---|---|---|---|---|
Composite Housing Market Index, SA (All Good=100) | 83 | 86 | 90 | 75 | 70 | 66 | 67 |
Single-Family Sales: Present | 90 | 92 | 96 | 81 | 76 | 72 | 73 |
Single-Family Sales: Next Six Months | 83 | 85 | 89 | 80 | 74 | 72 | 74 |
Traffic of Prospective Buyers | 68 | 73 | 77 | 58 | 56 | 49 | 50 |