Global| Jun 16 2020U.S. Home Builder Index Surges
by:Tom Moeller
|in:Economy in Brief
Summary
• Housing market continues to recover. • Rebound leaves activity below December's peak. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo moved up to 58 during June and added to its May rise [...]
• Housing market continues to recover.
• Rebound leaves activity below December's peak.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo moved up to 58 during June and added to its May rise to 37. Despite these increase, the index remained below the peak of 76 in December of last year. A reading of 45 had been expected in the INFORMA Global Markets survey. The NAHB figures are seasonally adjusted. Over the past 15 years, there has been a 71% correlation between the y/y change in the home builders index and the y/y change in new plus existing home sales.
The index of present sales conditions improved to 63 in June after rising to 42 in May. The index of expected conditions in the next six months rose to 68 from 46. The index measuring traffic of prospective buyers also rose m/m after surging in May.
Regional readings all improved. The index for the Northeast increased to 48 after dropping to 17 in May. The index for the Midwest rose to 51 from 32, while the West rose to 66 from 44. The index for the South improved to 62 from 42.
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 | Jun | May | Apr | Jun'19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 58 | 37 | 30 | 64 | 66 | 67 | 68 |
| Single-Family Sales: Present | 63 | 42 | 36 | 71 | 72 | 73 | 74 |
| Single-Family Sales: Next Six Months | 68 | 46 | 36 | 70 | 72 | 74 | 76 |
| Traffic of Prospective Buyers | 43 | 21 | 13 | 47 | 49 | 50 | 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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