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Economy in Brief

U.S. Home Builders Index Eases
by Tom Moeller  October 18, 2016

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 3.1% during October to 63 (6.7% y/y) following an unrevised jump to 65 in September. 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 eased to 69 (-1.4% y/y), but the index for the next six months increased to 72 (-4.0% y/y), a twelve month high.

Home builders reported that the traffic index eased 2.1% to 46 (-2.1% y/y).

Amongst the regional indexes, the Northeast posted a 9.5% jump (-11.5% y/y) to the highest level since March. The index for the Midwest rose 3.5% (-1.7% y/y) to the highest point since May. To the downside was the index for the West, falling 9.8% (-2.6% y/y). For the South, the index fell 5.9% (-4.5% 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 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 Oct Sep Aug Oct'15 2015 2014 2013
Composite Housing Market Index, SA (All Good=100) 63 65 59 65 59 52 51
 Single-Family Sales: Present 69 71 65 70 64 56 55
 Single-Family Sales: Next Six Months 72 71 66 75 66 61 58
 Traffic of Prospective Buyers 46 47 44 47 43 39 39
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