Global| May 15 2013U.S. Home Builders Index Recovers After Its April Swoon
by:Tom Moeller
|in:Economy in Brief
Summary
New home builders breathed easier as construction activity recovered this month. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo jumped to 44 in May following a downwardly revised April [...]
New home builders breathed easier as construction activity recovered this month. The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo jumped to 44 in May following a downwardly revised April reading of 41. Expectations were for an index reading of 43. Despite the latest recovery, the index level remained down 6.4% versus its winter peak. The index of single-family home sales increased to 48 while the index of sales during the next six months rose more moderately to 53. The home builders index of traffic of prospective home buyers also recovered m/m to 33, but that remained off versus its earlier high.
Monthly improvement occurred throughout most of the country in May. The index for the Northeast returned to the series' high. In addition, the indexes for the Midwest and the South recovered after the April declines. Working the other way, the index for the West fell to the lowest level in nine months. The NAHB figures are seasonally adjusted.
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 expectation figure is available in Haver's MMSAMER database.
The Impact of Housing Markets on Consumer Debt: Credit Report Evidence from 1999 to 2012 from the Federal Reserve Bank of New York can be found here.
| National Association of Home Builders | May | Apr | Mar | May'12 | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 44 | 41 | 44 | 28 | 34 | 16 | 16 |
| Single-Family Sales | 48 | 44 | 47 | 30 | 36 | 16 | 16 |
| Single-Family Sales: Next Six Months | 53 | 52 | 50 | 34 | 41 | 22 | 23 |
| Traffic of Prospective Buyers | 33 | 30 | 34 | 23 | 27 | 13 | 12 |
| Northeast | 41 | 31 | 38 | 31 | 29 | 17 | 20 |
| Midwest | 45 | 40 | 49 | 26 | 36 | 14 | 14 |
| South | 44 | 40 | 42 | 28 | 34 | 18 | 17 |
| West | 41 | 52 | 55 | 29 | 38 | 15 | 13 |
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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