by David Crowe — Eye on Housing
The National Association of Home Builders/Wells Fargo Housing Market Index increased two points from a revised November level of 19 to 21 in December. This is the third month for an increase and a total of seven point rise since September. Except for a 22 at the height of the home buyer tax credit in spring 2010, the December level is the highest since August 2007. The last three month seven point increase was in mid-2009.
The December increase was across all three components of the index with current sales up two points to 22, the highest since May 2010, expectations for the next six months up one point to 26, the highest since March 2011 and traffic up three points to 18, the highest since April 2008.
Regional variations were more muted and the primary increase was concentrated in the South. The Northeast region was down one point (from a one-point downwardly revised November) to 15, the Midwest remained unchanged (from a one-point upwardly revised November) at 24 and the West increased one point to 16. The South region index increased four points to 25, the highest since March 2008. A further investigation of the data reveals most of that renewed confidence was in the West South Central Division, which includes Texas, Oklahoma, Louisiana and Arkansas. The NAHB/First American Improving Markets Index also confirms the concentrations of recovering markets are located in energy- and agriculture-based states.