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Economy in Brief

U.S. Home Builder Index Eases Again
by Tom Moeller  April 16, 2018

The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo slipped to 69 during April from an unrevised 70 in March. It was the lowest figure since November. The reading compared to expectations for 70 in the Informa Global Markets Survey. The NAHB figures are seasonally adjusted. During the last ten years, there has been a 65% 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 declined to 75, the lowest reading in six months. The index for conditions in the next six months fell to 77, the lowest level in three months.

Home builders reported that the traffic of prospective buyers index held steady at 51 (-1.0% y/y) but remained up sharply from the average of 12 in 2010.

Amongst the regional indexes, the index for the Midwest was stable m/m (-4.5% y/y) at the lowest level since September. The index for the South declined 2.7% (+2.9% y/y) to the lowest level since November. The reading for the West fell 1.3% (-1.3% y/y) and the index for the Northeast increased 1.9% (22.2% 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 Apr Mar Feb Apr '17 2017 2016 2015
Composite Housing Market Index, SA (All Good=100) 69 70 71 68 68 61 59
 Single-Family Sales: Present 75 77 77 74 74 67 64
 Single-Family Sales: Next Six Months 77 78 80 75 76 67 66
 Traffic of Prospective Buyers 51 51 54 52 50 45 43
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