Housing Market Index Rises Two Points

The new home market is one of the bright spots of the economy. The housing market index rose 2 points in the August report and is back at the 60 level for the second time this year. Readings over 50 indicate optimism over pessimism. Components show gains for both present sales and future sales but continued weakness in traffic where first-time buyers are still scarce. Regional data show the West, which is a key region for new homes, out in front followed closely by the South which is the largest region. The Midwest is showing only moderate strength with the Northeast in continued contraction.

Recent History Of This Indicator:
The housing market index inched 1 point lower in July to 59 after rising 2 points in June to the year's best of 60. Before that it was four months in a row at 58 which is where forecasters see the index returning in August. Weakness in the report has not been in sales but in traffic which continues to be held down by light interest from first-time buyers.