Home builders are reporting strong but slowing activity, at 61 for the December housing market index vs 62 and 65 in the prior two months. Both present sales, at 66, and 6-month sales, at 67, eased in the month. Traffic, the third component and one that has lagged badly this cycle, is down 2 points at a sub-50 reading of 46. Weakness here reflects lack of first-time buyers in the new home market.
Turning to regional data, the highest composite score by far goes to the West, at an enormously strong 78, followed by the South, at 62. Two less watched regions for new homes, the Midwest and North, trail at 55 and 49.
The new home sector has been trending higher this year but has been volatile with gains often less than convincing. Housing starts in tomorrow's report for November are expected to bounce higher following a depressed October while permits, which bounced higher in October, are expected to ease.
The housing market index has been very solid though the November report did come in well under expectations, at 62 for a 3 point loss. Both future and present sales slowed in November but not traffic which, though still lagging this cycle, has been showing new life thanks to greater interest from first-time buyers. The Econoday consensus is calling for a 1 point rebound in December to 63.