Haver Analytics
Haver Analytics
| Sep 18 2023

U.S. Home Builders Index Plunges in September

  • Unexpected decline brings index to five-month low.
  • Buyer traffic drops to lowest since February.
  • Regional weakness is broad-based.

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 10.0% (-2.2% y/y) during September to 45 after falling 10.7% in August to 50. The index stood at the lowest point since April. A reading of 50 had been expected in the INFORMA Global Markets survey. The seasonally-adjusted index reached a record of 90 in November 2020.

Each of the composite index's three components fell this month. The index of present sales conditions fell 10.5% to 51 this month after falling 8.1% to 57 August. It was down 5.6% y/y and at the lowest level since April. The index of expected sales over the next six months fell 10.9% (+6.5% y/y) to 49 from 55, and it too stood at the lowest level in six months. The index measuring traffic of prospective buyers dove 14.3% (-3.2% y/y) to 30, but remained higher than the low of 20 in both November & December 2022.

Declines were logged across regions this month. The index for the Northeast declined 12.7% (+2.1% y/y) following an 8.3% August fall. This index hit the lowest point in four months. The index for the West weakened 8.7% (+23.5% y/y) to the lowest level since April. The index for the South weakened 10.9% and was down 5.8 y/y. The index for the Midwest declined 9.5% both m/m and y/y and stood at the lowest level in six months. These regional series begin in December 2004.

The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low." The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. These data are included in Haver's SURVEYS database.

  • 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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