U.S. Home Builders Index Edges Higher in April
by:Tom Moeller
|in:Economy in Brief
Summary
- Activity is measurably above its December low.
- Buyer traffic held steady but improves from yearend.
- Regional performance is mixed.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose 2.3% this month (-41.6% y/y) to 45 from 44 in March. The reading is up from its December low of 31 and the highest level since last September. A reading of 44 had been expected in the INFORMA Global Markets survey. The seasonally-adjusted index reached a record of 90 in November 2020.
Performance amongst the composite index's three components was positive this month. The index of present sales conditions improved to 51 (-40.7% y/y) from 49 and was at the highest level since September. The index of expected sales over the next six months increased to 50 (-31.5% y/y) from 47 and was higher than a low of 31 last November. The index measuring traffic of prospective buyers held m/m at 31 (-49.2% y/y) but was improved from the low of 20 in both November & December 2022.
The regional indexes were mixed this month. The index for the Midwest increased 8.3% (-37.1% y/y), up for the third month in the last four. The index for the West improved 13.9% (-51.2% y/y) and was at the highest level since August. The index for the South held steady (-39.0% y/y) but increased 51.5% during the last five months. The index for the Northeast also held steady for the second straight month (-37.8% y/y) but increased 43.8% in the last four months. These regional series begin in December 2004.
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.
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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