Global| Nov 18 2008U.S. Home Builders' Survey Lower Still
by:Tom Moeller
|in:Economy in Brief
Summary
The November Housing Market Index (HMI) from the National Association of Home Builders plumbed a new record low. At a single level of 9 nearly halved the old record low of 14 reached just last month. The index is compiled from survey [...]
The November Housing Market Index (HMI) from the National Association of Home Builders plumbed a new record low. At a single level of 9 nearly halved the old record low of 14 reached just last month. The index is compiled from survey questions asking builders to rate market conditions as “good”, “fair”, “poor” or “very high” to “very low”. Numerical equivalent results over 50 indicate a predominance of “good” readings.
Since 1990, the year-to-year change in this index has had a correlation of 72% with the year-to-year percentage change in new single-family home sales. As a result, the latest HMI index at best indicates a bottoming of the housing market's troubles.
The Home Builders Association indicated that its sub-index of present sales conditions also fell to a record low of 8. That was down from last year's average level of 27 and 2006's average of 45.
Builders’ expectations for sales six months was relatively strong an held steady at a level of 19. The “traffic of prospective buyers, however, fell to a new low index reading of 7.
Each of the country's regions showed deterioration in the index as conditions in each region fell to a new low.
Not only are builders disturbed by the market for new homes, but the appraisal of conditions for remodeling a home also reached a record low during the third quarter.
The current market condition for remodeling of a home also is deemed poor.
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.
Mortgage Innovation, Mortgage Choice, and Housing Decisions from the Federal Reserve Bank of St. Louis can be found here.
Changing the Rule: State Mortgage Foreclosure Moratoria During the Great Depression is available here.
| Nat'l Association of Home Builders | November | October | November '07 | 2007 | 2006 | 2005 |
|---|---|---|---|---|---|---|
| Composite Housing Market Index | 9 | 14 | 19 | 27 | 42 | 67 |
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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