Global| Aug 16 2019U.S. Home Builder Sentiment Improves Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose to 66 in August from 65 during July. The index has been trending higher since its December 2018 low, but remains below the expansion [...]
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose to 66 in August from 65 during July. The index has been trending higher since its December 2018 low, but remains below the expansion high of 74 reached in December of 2017. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 65% 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 rose to 73 this month from 71 in July. It was 12 points above December's low. The index of expected conditions in the next six months eased to 70 from 71 in July. The index measuring traffic of prospective buyers strengthened to 50 in August from 48 in July. It was the highest measure since October.
Regional readings mostly improved this month. The index for the Midwest posted a strong increase to the highest level since October 2018. The index for the Northeast and for the West edged higher. In the South, the index held steady and has been trending sideways since March.
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 a diffusion index with numerical results over 50 indicating a predominance of "good" readings. 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 months and 0.2722 for traffic of prospective buyers. The results are included in Haver's SURVEYS database.
| National Association of Home Builders | Aug | Jul | Jun | Aug'18 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 66 | 65 | 64 | 67 | 67 | 68 | 61 |
| Single-Family Sales: Present | 73 | 71 | 71 | 73 | 73 | 74 | 67 |
| Single-Family Sales: Next Six Months | 70 | 71 | 70 | 72 | 74 | 76 | 67 |
| Traffic of Prospective Buyers | 50 | 48 | 47 | 49 | 50 | 50 | 45 |
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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