Global| Jul 18 2017U.S. Home Builder Index Falls Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 3.0% to 64 during July following a June fall of 4.3% fall to 66, revised from -2.9%. Despite five m/m declines this year, the index [...]
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 3.0% to 64 during July following a June fall of 4.3% fall to 66, revised from -2.9%. Despite five m/m declines this year, the index remained 10.3% higher y/y. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 72% correlation between the y/y change in the home builders index and the y/y change in housing starts.
The index for conditions in the next six months fell 2.7% (+10.6% y/y) to 73. The index of present conditions in the housing market dropped 2.8% (+11.1% y/y) to 70. Both declines were the fifth this year.
Home builders reported that the traffic index eased 2.0% m/m to 48, but remained 6.7% higher y/y. The index has fallen in all but one month this year.
Amongst the regional indexes, the index for the Northeast rose 4.3% (17.1% y/y). The index for the West similarly rose 4.2% m/m (5.7% y/y), but the South's index decreased 7.4% (+5.0% y/y). In the Midwest, the index declined 5.9% (14.3% 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 | Jul | Jun | May | Jul'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 64 | 66 | 69 | 58 | 61 | 59 | 52 |
| Single-Family Sales: Present | 70 | 72 | 75 | 63 | 67 | 64 | 56 |
| Single-Family Sales: Next Six Months | 73 | 75 | 78 | 66 | 67 | 66 | 61 |
| Traffic of Prospective Buyers | 48 | 49 | 51 | 45 | 45 | 43 | 39 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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