• Housing market activity remains below November high.

• Activity is mixed regionally.

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose 1.2% to 83 during April after falling 2.4% in March to 82. The index reached a record of 90 last November. The April decline matched expectations 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.

Performance amongst the composite index's three components was mixed this month. The index of present sales conditions rose slightly and recovered a piece of the March decline. The index of expected sales six months fell 2.4% in April to 81. The index measuring traffic of prospective buyers rose 4.2% to the highest level since November.

Regional index performance also varied in April. The index for the Northeast eased 2.3% after falling 1.1% in March. The index for the Midwest declined 3.8%, down for the fourth month in the last five. The index for the South rose 2.4% after holding steady for two months. The index for the West rose to the highest level in three months. 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.