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Economy in Brief

U.S. Home Builders Index Eases
by Tom Moeller  April 17, 2017

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 4.2% to 68 during April and reversed half of the prior month's increase. Despite the decline, the index remained 17.2% higher y/y. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 72% correlation between the y/y change in the home builders index and the y/y change in housing starts.

The index of present conditions in the housing market declined 3.9% to 74 (+17.5% y/y). The index for conditions in the next six months fell 3.8% to 75 (+21.0% y /y).

Home builders reported that the traffic index eased 1.9% to 52 (25.6% y/y), but remained 18.2% higher y/y.

Amongst the regional indexes, the index for the Northeast fell 15.1% (+9.8% y/y). For the South, the index eased 1.4% (+20.7% y/y). In the Midwest, the index fell 6.9% (+19.6% y/y). The index for the West remained unchanged (14.9% 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 six 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 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'16 2016 2015 2014
Composite Housing Market Index, SA (All Good=100) 68 71 65 58 61 59 52
 Single-Family Sales: Present 74 77 71 63 67 64 56
 Single-Family Sales: Next Six Months 75 78 73 62 67 66 61
 Traffic of Prospective Buyers 52 53 46 44 45 43 39
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