U.S. Home Builder Index Slips in January
by:Tom Moeller
|in:Economy in Brief
Summary
- Decline reverses December improvement.
- Future sales & traffic fall but current sales hold steady.
- Weakness extends throughout the country except the West.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 1.2% in January to 83 (unchanged y/y) and reversed its December gain to 84. The decline followed four consecutive monthly increases. Stability had been expected in the INFORMA Global Markets survey.
The Home Builders indicated that "NAHB analysis indicates the aggregate cost of residential construction materials has increased almost 19% since December 2021," due to supply chain issues.
The index of expected sales in the next six months fell 2.4% and was unchanged y/y at 83. The index measuring traffic of prospective buyers fell 2.8% (+1.5% y/y) to 69 and reversed December's rise. The index of present sales conditions held steady both m/m and y/y at 90 in January.
This month's regional movement was mixed. The index for the Northeast fell 11.3% (+4.4% y/y) to 71 following a 15.9% December gain. In the South, the home builder index declined 2.2% (+6.1% y/y) to 87 and reversed December's rise. In the Midwest, the index fell 2.6% (-7.5% y/y) to 74 following a 1.3% December improvement. Rising 1.1% (-4.3% y/y) was the index for the West as it reversed December's decline. 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. The Informa Global Markets survey is in Haver's MMSAMER database.
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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