Global| Dec 15 2015U.S. Home Builders Index Falls Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 1.6% to 61 during December after falling 4.6% in November. It was the lowest level in three months and the figure fell short of [...]
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 1.6% to 61 during December after falling 4.6% in November. It was the lowest level in three months and the figure fell short of expectations for 63 in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. During the last ten years, there has been an 80% correlation between the y/y change in the home builders index and the y/y change in single-family housing starts.
The index of single-family home sales fell 1.5% (+6.5% y/y) to 66. Similarly, the index of expected sales during the next six months declined 2.9% (+4.7% y/y) to 67.
Home builders reported that their traffic index fell 4.2% to 46, the lowest level since August.
The housing market index decline reflected declines through most of the country. In the Midwest, the homebuilders index declined 8.3% (+1.9% y/y) to the lowest level since May and for the Northeast it eased 2.0% (+6.5% y/y). In the West, the index fell 1.3% (+2.7% y/y) and reversed the November gain but in the South it remained unchanged (6.9% y/y).
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 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 six 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.
| National Association of Home Builders | Dec | Nov | Oct | Dec'14 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 61 | 62 | 65 | 58 | 59 | 52 | 51 |
| Single-Family Sales: Present | 66 | 67 | 70 | 62 | 64 | 56 | 55 |
| Single-Family Sales: Next Six Months | 67 | 69 | 75 | 64 | 66 | 61 | 58 |
| Traffic of Prospective Buyers | 46 | 48 | 47 | 46 | 43 | 39 | 39 |
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.
