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Economy in Brief

U.S. Home Builders Index Retreat Is Country Wide
by Tom Moeller  October 16, 2014

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell back to 54 during October from an unrevised 59 in September. The figure missed expectations for 59 in the Informa Global Markets Survey.

The index of single-family home sales fell to 57, the lowest level in three months. The index of expected sales during the next six months also returned to a three-month low of 64. The NAHB figures are seasonally adjusted.

Realtors reported that their traffic index retreated to 41 after spiking in September.

Housing market activity eased around the country. The index for the Northeast fell m/m but was up by one-third y/y. The index reading for the Midwest declined to a three-month low (-14.5% y/y) while the West's reading fell to a four-month low (-8.5% y/y). The South's reading pulled back (+9.3% y/y) after the September jump.

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.

The Fed's latest Beige Book covering regional economic conditions can be found here.

National Association of Home Builders Oct Sep Aug Oct'13 2013 2012 2011
Composite Housing Market Index, SA (All Good=100) 54 59 55 54 51 34 16
 Single-Family Sales: Present 57 63 58 58 55 36 16
 Single-Family Sales: Next Six Months 64 67 65 61 58 41 22
 Traffic of Prospective Buyers 41 47 42 43 39 27 13
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