U.S. Home Builders' Index Is Firm But Unchanged M/M

The National Association of Home Builders/Wells Fargo reported that its index of housing market activity remained at its highest level since June of 2007. The Composite Housing Market Index for March was unchanged at 28 following several months of strong gain which were unrevised. The index of single-family home sales slipped a point to 29 following February's five point rise, but was still the highest reading since 2007. However, these figures still were down from levels near 70 in 2004. The index of sales during the next six months rose another two points to 36, also the best reading since 2007. Finally, the home builders' index of traffic of prospective was unchanged m/m to 22 and remained sharply improved versus last year. By region, the West retraced half of its February rise as the Midwest, Northeast and the South each rose. Each of these NAHB figures is seasonally adjusted.

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, improved slightly in Q3 to 72.9%. It thus remained near the record high, buoyed by lower home prices, lower interest rates and higher income. (There is a break in the series from 2002 to 2003.)

The Home Builders 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 NAHB has compiled the Housing Market Index since 1985. 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, along with other housing and remodeling indexes from NAHB Economics, are included in Haver's SURVEYS database. The expectation figure is available in Haver's MMSAMER database.