U.S. Home Builder Index Continues to Fall
by:Tom Moeller
|in:Economy in Brief
Summary
- Present & expected sales decline.
- Traffic of prospective buyers falls further.
- Regional declines are widespread except in the West.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo fell 13.2% (-60.2% y/y) during November to 33, the lowest level since April 2020. The index is down 63.3% from its November 2020 high of 90. A reading of 36 had been expected in the Informa Global Markets survey.
Each of the three HMI components declined again this month. The index of present sales conditions fell 13.3% (-56.2% y/y) to 39, the tenth decline in eleven months. The November level was 59.4% below the record-high of 96 in November 2020. The index of expected sales over the next six months dropped 11.4% in November (-63.1% y/y), down for a seventh consecutive month. The November value was the lowest level since April 2012. The index measuring traffic of prospective buyers fell 20.0% (-71.0% y/y), the eighth consecutive monthly decline.
Among the regions of the country, the Housing Market Index in Northeast fell 36.2% (-56.5% y/y). The other regions, the index in the South fell 17.1% (-60.9% y/y). In the Midwest, the index weakened 2.7% (-52.0% y/y). Working 12.0% higher (-68.2% y/y) was the index in the West.
The NAHB has compiled the Housing Market Index since 1985. It reflects survey questions which ask builders to rate sales and sales expectations as "good," "fair" or "poor" and traffic as "very high," "average" or "very low". The figures are diffusion indexes with values over 50 indicating a predominance of "good"/"very high" readings. In constructing the composite index, the weights assigned to the individual index components are: 0.5920 for single-family detached sales, present time, 0.1358 for single-family detached sales, next six months, and 0.2722 for traffic of prospective buyers. These data are included in Haver's SURVEYS database. The Informa Global Markets survey is in Haver's MMSAMER database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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