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Economy in Brief

U.S. Home Builders Index Slight Increase is Disappointing
by Tom Moeller  April 15, 2014

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo edged up one point this month to 47. The index now stands 6.8% above March of 2013. The latest reading disappointed consensus expectations for a larger rise to 50. The index of single-family home sales was unchanged at 51 and was 12 points lower than the December peak. The index of expected sales during the next six months rose 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 held steady at 32 and remained sharply below the peak reading of 46 last August.

The index reading of activity in the West fell six points to its lowest reading since last May. The reading for the Midwest showed a two point decline, also to its lowest level since May of last year. The index for the South was stable but the figure for the Northeast improved to its highest level in six months.

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.

National Association of Home Builders Apr Mar Feb Apr'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 47 46 46 41 51 34 16
 Single-Family Sales: Present 51 51 51 44 55 36 16
 Single-Family Sales: Next Six Months 57 53 54 52 58 41 22
 Traffic of Prospective Buyers 32 32 31 30 39 27 13
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