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JAN. HOUSING MARKET INDEX DECLINES
| The Housing Market Index (HMI) fell two points to 68 in January compared to the previous month, according to a report released yesterday by the National Association of Home Builders (NAHB). "Keep in mind that the January HMI survey was taken before the latest downshift in long-term mortgage rates, so there is good upside potential for this measure heading forward," said NAHB Chief Economist David Seiders. "The average rate on 30-year mortgages fell from an already attractive 5.85 percent in early January to an even more favorable 5.66 percent last week."
The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly 20 years. Homebuilders are asked to rate current sales of single-family homes and sales expectations for the next six months as "good," "fair," or "poor," where any number over 50 indicates that more builders view sales conditions as good than poor. The HMI has not been gauged below 50 since November of 2001. Each of the HMI's component indexes slipped in January compared to the previous month. The index gauging current sales of new single-family homes fell three points to 74 while the indexes gauging sales expectations for the next six months and traffic of prospective buyers each fell two points to 75 and 50, respectively. |