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Economy in Brief

U.S. Home Builders Index Remains Unchanged
by Tom Moeller  March 15, 2016

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo held steady m/m at 58, the lowest level in nine months. The NAHB figures are seasonally adjusted. During the last ten years, there has been an 81% correlation between the y/y change in the home builders index and the y/y change in single-family housing starts.

The index of single-family home sales was unchanged (+12.1% y/y) at 65. Offsetting this stability, however, was a 4.7% decline (+3.4% y/y) in the index of expected sales during the next six months. It was the lowest level in twelve months.

Home builders reported that their traffic index improved 10.3% following three straight months of decline.

The housing market index stability reflected little change throughout the country. In the West, the index held steady m/m (+24.1% y/y) while the index for the Midwest also was stable m/m (-5.0% y/y). The reading for the Northeast improved 2.2% (24.3% y/y) and the index in the South rose 3.5% (9.3% y/y).

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 Mar Feb Jan Mar'15 2015 2014 2013
Composite Housing Market Index, SA (All Good=100) 58 58 61 52 59 52 51
 Single-Family Sales: Present 65 65 68 58 64 56 55
 Single-Family Sales: Next Six Months 61 64 64 59 66 61 58
 Traffic of Prospective Buyers 43 39 44 37 43 39 39
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