Global| Oct 19 2009U.S. Home Builders' Index Recovery Stuttering This Month
by:Tom Moeller
|in:Economy in Brief
Summary
Housing continues to turn the corner toward recovery, but of late that recovery stuttered. The National Association of Home Builders reported that its October Composite Housing Market Index fell to 18 from 19 in September. Though the [...]
Housing continues to turn the corner toward recovery, but of late that recovery stuttered. The National Association of Home Builders reported that its October Composite Housing Market Index fell to 18 from 19 in September. Though the index remained double the low of 8 this past January, it's rate of improvement has slowed since the Spring. 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 a diffusion index, therefore, numerical results over 50 indicate a predominance of “good” readings.
The sub-index of sales during the next six months fell to 27 which was the lowest level since August. The present sales index also fell to 17 which equaled the 3Q average. Much of easing in the October composite index was due to a sharp decline in the West (+27.3% y/y). In the Midwest (+30.5% y/y) and in the South (+12.5% y/y) the index fell slightly while in the Northeast (+56.3% y/y) there was a continued gain.
The Home Builders' Association also reported that traffic of prospective buyers slipped during October after firm gains this past Spring and Summer.
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, fell slightly in the second quarter. 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.)
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.
Asia and the Global Financial Crisis is today's speech by Fed Chairman Ben S. Bernanke and it can be found here.
| Nat'l Association of Home Builders | October | September | October '08 | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Composite Housing Market Index (All Good = 100) | 18 | 19 | 14 | 16 | 27 | 42 |
| Single-Family Sales | 17 | 18 | 14 | 16 | 27 | 45 |
| Single-Family Sales: Next Six Months | 27 | 29 | 19 | 25 | 37 | 51 |
| Traffic of Prospective Buyers | 14 | 17 | 11 | 14 | 21 | 30 |
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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