New Home Sales Surge To New Expansion High

New home sales began to surge back in September and are now giving a significant lift to home builder sentiment as the housing market index rose a very sharp 5 points to a new expansion high at 74. The traffic component is a standout in the December report, surging 8 points to an expansion high of 58 to indicate a flood of new buyers in the market. Current sales are up 4 points at 81 with 6-month sales up 3 points to 79, also expansion highs. The West has a composite score of 85 followed by the Midwest at 76 and South at 75. The Northeast lags at 53. Today's report points to strength for tomorrow's housing starts and permits report.

Recent History Of This Indicator:
Home builders have been reporting rising confidence going into year end with the housing market index moving 4 points higher in October to 68 followed by a 2 point gain in November to 70 and the best reading since March. Strength in this report has not translated this year to equivalent strength in actual housing data though new home sales have in fact been coming alive in recent months. Forecasters see December's index holding at 70.