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Builder Indexes Down In April, But Trend Is Still Up

The dark and dirty job of pointing out that the NAHB Housing Market Index present conditions index is up 11 points versus last April and traffic is up 5 points falls to me, I guess. The mainstream media and the NAHB itself has already widely reported only the bad news that April was down versus March on a seasonally adjusted basis. The actual data, not seasonally adjusted,  is not publicly reported. My humble guess would be that the seasonal adjustment factors are really screwing with the data this month.

Of course the data was down! It was so warm in February and March that those months pulled demand forward from April. The current levels are still well above last year, and have not fallen back into the 2009-2011 range. Traffic is up 5 points versus April 2011, and the present conditions, which in essence represents the current level of sales, is up 11 points.  It still looks like a bottom to me. The next 3 months will tell.

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NAHB Housing Market Index and Traffic of Perspective Buyers- Chart- Click to enlarge

That being said, the overall levels are historically horrible, but an increase in activity from any level is incremental to the industry and the economy. It the indicator subsequently turns up from these levels, then the upturn will be confirmed, and in all likelihood the Commerce Department’s new home sales data will follow by lifting off somewhat from their current extreme lows. That data lags and is only current through February.  The next release of that data will be on Tuesday, April 24, for the month of March.

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