• Index posts the first monthly gain since April.

• Present sales conditions and home-buyer traffic increase while expected sales are unchanged.

• Activity is mixed regionally.

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose 1.3% m/m (-8.4% y/y) to 76 in September, the first m/m rise since April, after a 6.3% drop to 75 in August. An unchanged level of 75 was expected in the INFORMA Global Markets survey. The seasonally-adjusted index was 15.6% below the record high reached in November 2020.

Two of the three HMI components gained this month. The index of present sales conditions rose 1.2% (-6.8% y/y) to 82 in September after a 5.8% decline to 81 in August. The level was 14.6% below last November's record high of 96. The index measuring traffic of prospective buyers increased 3.4% (-17.6% y/y) to 61, the first monthly gain in five months, after a 9.2% decrease to 59. The index was 20.8% below the cycle high of 77 in November 2020. The index of expected sales over the next six months held at 81 (-4.7% y/y) for the third consecutive month.

Performance within the four regions of the country was mixed this month. The index for the Midwest rose 7.8% (-11.5% y/y) to 69, the biggest m/m rise since November 2020, after an 8.6% drop to 64. The index for the South was up 3.9% (-5.9% y/y) to 80 after a 7.2% drop to 77, still 11.1% below the November 2020 high. In contrast, the index for the Northeast fell 11.8% (-17.3% y/y) to 67, the lowest level since June 2020, after a 4.1% rebound to 76. The September fall was the sixth drop in seven months. The index for the West slid 5.9% (-9.1% y/y) to 80, the lowest level since July 2020, after a 1.2% increase to 85. 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.