U.S. Home Builders Index Slips to Twelve Month Low

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo edged lower to 45 this month from 46 in April, revised from 47. The latest figure was the lowest since May of last year and disappointed consensus expectations for a reading of 49. The index of single-family home sales fell to 48 and was 15 points lower than the December peak. The index of expected sales during the next six months improved to 57 but still was down eleven points from the August peak. The NAHB figures are seasonally adjusted.

Realtors reported that their traffic index of prospective buyers improved to 33 but remained sharply below the peak reading of 46 last August.

The index reading of activity in the West fell one point to its lowest reading in twelve months. The reading for the South also slipped to its lowest level in twelve months. The figure for the Northeast was stable m/m, but sharply below the high six months ago, while the figure for the Midwest also was stable at the twelve month low.

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.