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Economy in Brief

U.S. Home Builder Index Declines
by Tom Moeller  June 15, 2017

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo declined 2.9% to 67 during June following the May increase to 69, revised from 70. The index remained 11.7% 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 for conditions in the next six months fell 2.6% (+10.1% y/y) to 76. The index of present conditions in the housing market also declined 2.7% (+14.1% y/y) to 73.

Home builders reported that the traffic index eased 3.9% m/m to 49, but remained 6.5% higher y/y.

Amongst the regional indexes, the index for the Northeast fell 2.1% (+17.9% y/y). The index for the West fell 11.3% (+2.9% y/y) and the South's index decreased 4.2% (+6.3% y/y). In the Midwest, the index rose 6.2% (25.5% 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 Jun May Apr Jun'16 2016 2015 2014
Composite Housing Market Index, SA (All Good=100) 67 69 68 60 61 59 52
 Single-Family Sales: Present 73 75 74 64 67 64 56
 Single-Family Sales: Next Six Months 76 78 75 69 67 66 61
 Traffic of Prospective Buyers 49 51 52 46 45 43 39
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