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Economy in Brief

U.S. Home Builder Index Moves Higher
by Tom Moeller  November 16, 2017

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo increased 2.9% to 70 during November, adding to its October gain. The index was at the highest level since March, up 11.1% y/y. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 67% correlation between the y/y change in the home builders index and the y/y change in housing starts.

The index of present sales conditions in the housing market rose 2.7% to 77, up 11.6% y/y. The index for conditions in the next six months declined 1.3% to 77, but increased 11.6% y/y.

Home builders reported that the traffic of prospective buyers index rose to the highest level in six months, up 6.4% y/y.

Amongst the regional indexes, the index for the Northeast surged  28.6% (34.0% y/y) while the index for the South increased 4.3% (10.8% y/y). For the West, the index gained 1.3% both m/m and y/y, but for the Northeast the index held steady (10.2% 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 Nov Oct Sep Nov'16 2016 2015 2014
Composite Housing Market Index, SA (All Good=100) 70 68 64 63 61 59 52
 Single-Family Sales: Present 77 75 70 69 67 64 56
 Single-Family Sales: Next Six Months 77 78 73 69 67 66 61
 Traffic of Prospective Buyers 50 48 47 47 45 43 39
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