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Economy in Brief

U.S. Home Builders Index Recovers
by Tom Moeller  August 15, 2016

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo improved to 60 during August from 58 in July, revised from 59. The NAHB figures are seasonally adjusted. During the last ten years there has been an 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 rose to 65 from 63 while the index for the next six months increased to 67 from 66. Both readings remained down versus their Q4'15 peaks.

Home builders reported that the traffic index eased to 44 from 45, and also remained below the Q4'15 high.

Movement in the regional indexes was mixed. The index for the Northeast jumped m/m to the highest level since March. The South's figure recovered its July decline. To the downside, the Midwest index declined to the lowest level since May of last year. The index for the West eased moderately.

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.

What Drives Forecaster Disagreement about Monetary Policy? from the Federal Reserve Bank of New York can be found here.

National Association of Home Builders Aug Jul Jun Aug'15 2015 2014 2013
Composite Housing Market Index, SA (All Good=100) 60 58 60 61 59 52 51
 Single-Family Sales: Present 65 63 64 66 64 56 55
 Single-Family Sales: Next Six Months 67 66 69 70 66 61 58
 Traffic of Prospective Buyers 44 45 46 45 43 39 39
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