The National Association of Home Builders produces a housing market index based on a survey in which respondents from this organization are asked to rate the general economy and housing market conditions. The housing market index is a weighted average of separate diffusion indexes: present sales of new homes, sale of new homes expected in the next six months, and traffic of prospective buyers in new homes. (National Association of Home Builders/Wells Fargo) Why Investors Care
| Released on 11/19/07 For Nov 2007 | ||||||||
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Highlights
The housing market index held at a severely weak 19 in November with single-family sales unchanged at 18, six-month sales down 1 to 25, and the prospective buyer index up 2 to 17. The rise in prospective buyers is the only good news in the report, along with perhaps the fact that the overall reading didn't fall any further. Fifty is the breakeven level for these readings with sub-50 levels indicating that more builders are reporting poor conditions and good conditions. And given these very low numbers, in fact record lows going back to the start of the series in 1985, the numbers indicate that many more builders are reporting poor conditions than good conditions.
In the text of the report, the National Association of Home Builders, which compiles the data, pushed back their estimate for improvement in the housing sector from the second quarter to the second half of next year. The results are consistent with last week's pending home sales report which didn't show much improvement holding at a year-on-year drop of 20 percent. Today's report won't raise any hopes for improvement in next week's existing and new home sales reports, and it won't help lift the stock market which seemed to dip in reaction to the data.
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