Housing Market Index Rises Again In August

The new home sector is increasingly a central source of strength for the economy and builders are increasingly optimistic. The housing market index rose 1 point to a very strong 61 in August with the future sales component leading the way at 70. Current sales are at 66 with traffic continuing to lag but less so, at 45 for a 2 point gain in the month. By region, the South and West show the greatest composite strength at 63 each followed by the Midwest at 58 and the Northeast, which is the smallest region for new homes, still showing contraction at a sub-50 reading of 46.

Strength in the labor market is the driving force behind strength for new homes where lack of supply continues to motivate builders.

Recent History Of This Indicator:
The housing market index is coming off a 10-year high in July at 60 and is expected to add another notch in August to 61. With inventories of new homes thin and with sales going up, optimism among home builders has been growing.