Global| Mar 15 2010U.S. Home Builders’ Index Deteriorates
by:Tom Moeller
|in:Economy in Brief
Summary
Poor weather in much of the country likely affected housing market activity during 1Q. The National Association of Home Builders' index of housing market activity fell this month to 15 from 17 in February and for 1Q the index's [...]
Poor weather in much of the country likely affected housing market activity during 1Q. The National Association of Home Builders' index of housing market activity fell this month to 15 from 17 in February and for 1Q the index's average level was the lowest since 2Q '09. Nevertheless, the index remained double the low of 8 hit last January. The index is compiled from 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 over 50 indicating a predominance of “good” readings.
The present sales index fell m/m to 15 from 17 and for the second quarter also was the lowest since 2Q '09. The index of sales during the next six months also deteriorated to the lowest level since April of last year.The Home Builders' Association also reported that the traffic of prospective buyers fell to the lowest level in twelve months.
Supporting the notion of a strong weather factor was a sharp decline in the Builders' index for the Midwest and in Northeast for 1Q. In the South the index showed gains of one-quarter versus last year during 1Q. The index for the West slipped through the quarter but remained double the year-ago level.
The Home Builders' Housing Opportunity Index, which is the share of homes sold that could be considered affordable to a family earning the median income, slipped during 4Q '09 (the latest available figure) to 70.8%. It had jumped earlier to a record high of 72.5% buoyed by lower home prices, lower interest rates and higher income. (There is a break in the series from 2002 to 2003.)
| Nat'l Association of Home Builders | March | February | January | March '09 | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index (All Good=100) | 15 | 17 | 15 | 9 | 15 | 16 | 27 |
| Single-Family Sales | 15 | 17 | 15 | 8 | 13 | 16 | 27 |
| Single-Family Sales: Next Six Months | 24 | 27 | 26 | 15 | 24 | 25 | 37 |
| Traffic of Prospective Buyers | 10 | 12 | 12 | 9 | 13 | 14 | 21 |
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.
