U.S. Home Builder Index Holds Steady

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo was unchanged (+6.8% y/y) at 68 during July, which was unrevised. The latest reading compared to expectations for 69 in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 57% correlation between the y/y change in the home builders index and the y/y change in new home sales.

The index of present sales conditions in the housing market held m/m at 74 (+5.7% y/y) and remained below its December high of 80. The index for conditions in the next six months declined 2.7% to 73. It was unchanged y/y at the lowest level since September of last year.

Home builders reported that the traffic of prospective buyers index improved m/m to 52, the highest level since February.

Amongst the regional indexes, the index for the South increased 2.9% (12.7% y/y) to 71, but remained below the December high of 75. The index for the Midwest held steady both m/m and y/y. Elsewhere in the country there was weakness. The index for the Northeast fell 3.4% (+16.7% y/y) to 56 and reversed the June rise. The reading for the West declined 3.9% (-1.4% y/y) to 73, the lowest level since June of last year.

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.