Global| May 17 2021U.S. Home Builder Index Holds Steady in May
by:Tom Moeller
|in:Economy in Brief
Summary
• Building activity is currently slower than last autumn. • Activity is mixed regionally. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo was unchanged this month at 83, after rising [...]
• Building activity is currently slower than last autumn.
• Activity is mixed regionally.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo was unchanged this month at 83, after rising slightly in April from 82 in March. Stability was expected m/m in the INFORMA Global Markets survey. The seasonally-adjusted index reached a record of 90 last November. 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 remained at 88, after rising slightly from 87 in March. The index of expected sales six months improved modestly to 81 and reversed a piece of its April decline. The index measuring traffic of prospective buyers slipped 1.4% m/m but remained down 5.2% from the cycle high in November.
Regional index performance also varied in May. The index for the Northeast fell 8.3%, down for the third straight month. The index for the Midwest declined 4.0% m/m and was down 4.9% over the last six months. The index for the South rose 2.4% for the second straight month. The index for the West held steady m/m but was 7.1% below the November high. These regional series begin in December 2004.
Record-High Prices on all Building Materials Threaten Housing Affordability from the National Association of Home Builders can be found here.
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 | May | Apr | Mar | May '20 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 83 | 83 | 82 | 37 | 70 | 66 | 67 |
| Single-Family Sales: Present | 88 | 88 | 87 | 42 | 76 | 72 | 73 |
| Single-Family Sales: Next Six Months | 81 | 80 | 83 | 46 | 74 | 72 | 74 |
| Traffic of Prospective Buyers | 73 | 74 | 72 | 13 | 56 | 49 | 50 |
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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