Housing Market Index rises four points as of mid-January

Indicating that builders once again view the market for new single-family homes as optimistically as they did prior to the Sept. 11 terrorist attacks, the Na-tional Association of Home Builders' Housing Market Index rose four points to 61 in January, according to a Jan. 16 NAHB news release. That figure is one point above what it was in August 2001 and is the HMI's highest reading since November 2000.

"This substantial gain, coming on the heels of an eight-point rise in December, indicates that builders' confidence in the single-family market has fully rebounded in the wake of Sept. 11 and the signs of economic weakness that were emerging at that time," said NAHB President Bruce Smith.

Smith attributed the swift recovery from a 47 reading in October 2001 to im-proving consumer confidence, favorable interest rates on home mortgages, and solid investment aspects of homeownership. He noted that this improvement is a good sign for the overall economy, since housing and related industries account for a substantial portion of the Gross Do-mestic Product.

The HMI is derived from a monthly survey of builders that NAHB has been conducting for nearly two decades. Home builders are asked to rate current sales of single-family homes and sales expectations for the next six months as good, fair or poor.

They also are asked to rate traffic of prospective buyers as either high to very high, average or low to very low. Scores for responses to each component are used to calculate a seasonally adjusted index, where any number more than 50 indicates that more builders view sales conditions as good than poor.

In January's HMI, the index gauging current single-family home sales and the index gauging sales expectations for the next six months each rose three points from December 2001, to 64 and 67, respectively, reaching their highest levels since August 2001. The index gauging traffic of prospective buyers rose four points to 50, its highest reading since February 2000.