Global| Feb 18 2014U.S. Home Builders Index Registers Historic Decline Due to Snowfall
by:Tom Moeller
|in:Economy in Brief
Summary
Heavy snowfall this month depressed the Composite Housing Market Index from the National Association of Home Builders-Wells Fargo by 10 points versus January to 46. The m/m decline was the largest in the series history and the index [...]
Heavy snowfall this month depressed the Composite Housing Market Index from the National Association of Home Builders-Wells Fargo by 10 points versus January to 46. The m/m decline was the largest in the series history and the index stood at the lowest level in nine months. The latest reading disappointed expectations for stability at 56. The index of single-family home sales dropped 11 points to 51 while the index of sales during the next six months dropped a lesser 6 points to 60. The NAHB figures are seasonally adjusted.
Realtors reported that their traffic index of prospective buyers evaporated by 9 points to 31, the lowest level since April.
Activity fell sharply around the country. Activity in the West took the largest hit and the 14 point decline reversed the gains of the prior two months. The index for the Midwest followed with a 9 point drop to the lowest level in 9 months. The 8 point decline in the index for the Northeast lowered it to the lowest point since October. Finally, the 7 point decline in the South repeated its January downdraft.
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 | Feb | Jan | Dec | Feb'13 | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Composite Housing Market Index, SA (All Good=100) | 46 | 56 | 57 | 46 | 51 | 34 | 16 |
| Single-Family Sales: Present | 51 | 62 | 63 | 51 | 55 | 36 | 16 |
| Single-Family Sales: Next Six Months | 54 | 60 | 62 | 50 | 58 | 41 | 22 |
| Traffic of Prospective Buyers | 31 | 40 | 43 | 32 | 39 | 27 | 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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