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NAHB Housing Market Index
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|
 |
| MOST RECENT
STATISTIC: |
15 |
| Grade: |
F |
| PERIOD COVERED: |
Jan. 2010 |
| Date Released: |
01/19/10 |
| Next Released: |
02/16/10 |
|
|
|
01/10 |
12/09 |
11/09 |
10/09 |
01/09 |
|
| Index |
15 |
16 |
17 |
17 |
8 |
| SF sales :present |
15 |
16 |
17 |
17 |
6 |
| Next 6 months |
26 |
26 |
28 |
26 |
17 |
| Shopper Traffic |
12 |
13 |
13 |
13 |
8 |
|
| p-preliminary;
r-revised
Source:
National
Association of Home Builders |
Analysis
for the Housing Market
By:Ken Lee
The NAHB Housing Market Index declined again in January and slipped back to its lowest levels since June 2009. The index fell to a reading of 15 which is a one-point drop from a reading of 16 in December. Lower mortgage rates and the extended homebuyer tax credit has helped resales but has not had such a positive impact on the new homes market. The winter months are typically the slowest months for homebuying activity although many hope that low rates and the homebuyer tax credit would help spark demand.
Two of the three component indexes reported monthly declines while another remained unchanged. The index for present conditions in single-family home sales fell one point from the previous month to a reading of 15. The index for single-family home sales in the next 6 months remained unchanged from the previous month at a reading of 26. The index measuring traffic of prospective buyers dropped declined one point from December levels to a reading of 12.
All of the four regions posted monthly declines in homebuilder confidence. The West region posted the largest monthly drop, declining three points from December levels to a reading of 16. Homebuilder confidence in the other three regions all declined by one point from their December levels with the Northeast declining to 22, Midwest falling to 11, and the South falling to a reading of 16.
Definitions and Importance for the Housing Market
By:Eric Alanis
The housing market index (HMI) is from the National Association of Homebuilders (NAHB), and is a composite of several monthly surveys of builders. Homebuilders are asked to rate as "good", "fair", or "poor" their current sales of single-family homes and their expectations of sales for the next six months. Also rated is the traffic of prospective buyers, ranging from "very low" to "very high".
Scores for each component are used to calculate a seasonally adjusted overall index. If all respondents, numbering approximately 1,000 builders, answer "Good", the index is 100. Conversely, if all respondents answer "Poor", the index is 0. If an equal number of respondents answer "Good" and "Poor", the index is 50. Therefore, any number over 50 indicates that there are more builders who consider sales conditions to be good than builders who view sales conditions as poor.
The housing market index is a good indicator of market conditions from the perspective of builders, and has shown to correlate with current and future housing starts. As an indicator of home building activity in the near future, the index tracks the "pulse" of what homebuilders perceive about the housing market. If they are satisfied with home buyer traffic and have positive expectations of the housing market, building activity will continue at a rate to meet the pace of the marketplace. On the other hand, if builders' expectations decrease along with their satisfaction with homebuyer traffic, they may scale back production schedules to match an anticipated slow-down in the market place and reduced demand.
For more information on the Housing Market Index, go to: http://www.nahb.com
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