U.S. Home Builders Index Increases in July
by:Tom Moeller
|in:Economy in Brief
Summary
- Activity increases in each month this year.
- Buyer traffic continues to rise.
- Regional performance remains mixed.
The Composite Housing Market Index from the National Association of Home Builders-Wells Fargo rose 1.8% both m/m and y/y during July to 56 from 55 in June. Earlier figures in 2023 were revised. The reading is up from its December low of 31 and the highest level since June 2022. A reading of 56 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 mixed this month. The index of present sales conditions improved to 62 (-3.1% y/y) from 61 and was at the highest level since last July. The index of expected sales over the next six months fell to 60 (+22.4% y/y) from 62 and was higher than a low of 31 last November. The index measuring traffic of prospective buyers increased to 40 (8.1% y/y) and was improved from the low of 20 in both November & December 2022.
The regional indexes were mixed this month. The index for the Northeast increased 15.4% (5.3% y/y), up for the third month in the last four. The index for the West improved 8.0% (14.9% y/y) and was at the highest level since June of last year. Working lower, the index for the South eased 1.7% both m/m and y/y. The index for the Midwest fell moderately (-6.1% y/y) but increased 43.8% in the last six 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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