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 12/17/07 For Dec 2007 | ||||||||
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Highlights
The housing market index from the National Association of Home Builders held at 19 in December, a record low going back all 22 years in the data but at least no worse than November. But there was bad news among the components as the prospective buyer index plunged 3 points to 14. Fifty is break even for these indexes, meaning that these levels are very low and indicate that the majority of builders are reporting month-to-month contraction.
The report said builders are cutting inventories and bracing for a slow winter. It said results are especially weak in the Northeast due to bad weather. There was little initial reaction to the report, one which really doesn't change the outlook for the housing sector. Most indicators are down like the today's index, but pending home sales have improved which does hold out hope for improvement in sales of existing homes later this month.
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