U.S. Home Builders Index Improves in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Overall reading is highest since April.
- Each component improves.
- Regional indexes are mixed.
The Housing Market Index, compiled by the National Association of Home Builders/Wells Fargo, rose 7.0% (35.3% y/y) in November to 46 after rising 4.9% in October. It has increased from a low of 34 twelve months earlier but remained below the break-even point of 50, where it’s been since April. The index stands below a July 2023 high of 56 and a November 2020 peak of 90.
The rate on a 30-year fixed rate mortgage averaged 6.79% in the first two weeks of November versus 6.43% in October. It remained below the high of 7.79% in the last week of October 2023, according to Freddie Mac.
The single-family sales measure rose 4.3% (22.5% y/y) to 49 this month from 47 in October. It was the highest reading since May. The prospective sales index in six months rose 12.3% (64.1% y/y) to 64 from 57 in October. It was the highest level since April 2022. The traffic of prospective buyers’ index improved 10.3% (52.4% y/y) to 32 in November. It was the highest level since April, up from a low of 25 in August.
Housing performance across the country was mixed in November. The Northeast index rose 13.5% (11.3% y/y) to 59 from 52. It was the highest level since June. The index for the Midwest improved 14.0% (58.1% y/y) to 49 from 43 in October. Moving lower, the index in the South fell 2.3% (+20.0 y/y) to 42 and remained below the recent high of high of 52 in March. The index in the West declined 11.4% (+39.3% y/y) to 39 from 44 in October. The index hit a low of 28 in November of last year.
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. The regional indexes run back to December 2004.
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.
