The National Association of Home Builders reported that their February index of housing market activity held at 16 for the fourth consecutive month; the average for all of 2010. The latest figure remained above the all-time low of 8 reached in January of 2009. Same as last month, the figure disappointed Consensus expectations were for an uptick to 17.

The Home Builders index is compiled from 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. During the last ten years there has been a 80% correlation between the y/y change in the index and the change in new plus existing single family home sales.

The index of single-family home sales moved slightly higher to 17 but remained down from levels near 80 in 2004. The index of sales during the next six months also ticked up to 25 from a downwardly revised January figure. The home builders' index of traffic of prospective buyers held at 12. Each of these NAHB figures is seasonally adjusted. Upticks in the builders' index for the Northeast and the South was offset by slight declines in the West and the Midwest.

The Home Builders' Housing Opportunity Index, which is the share of homes sold that could be considered affordable to a family earning the median income, inched down in Q3 (the latest figure) to 72.1%. That still was near the record high, buoyed by lower home prices, lower interest rates and higher income. (There is a break in the series from 2002 to 2003.)

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.