The U.S. Housing Market Index (HMI), calculated by the National Association of Home Builders and Wells Fargo, edged up again in July. The index bottomed out in January 2009 then began a slow climb. It rose two points from 15 in June to 17 in July.
NAHB points out that new and existing home sales have showed increased for three months running. Builders have taken control of inventories and the number of homes for sale as of June 2009 was 281,000 - its lowest level in 11 years. The government reports the Months of Supply dropped to 8.8 in June, the lowest it has been since October 2007.
NAHB said the seasonally adjusted S&P/Case-Shiller 20-City and 10-City Home Price Indices were down, but only slightly, in May over April. Some cities showed price increases. NAHB says the results are an indication that housing supply and demand have come into balance, or are approaching balance, and housing demand is growing. The first-time home buyer tax credit and better home affordability are helping spur buyers.
NAHB's HMI is a weighted, seasonally adjusted statistic derived from ratings for present single-family sales, single-family sales in the next six months, and buyers traffic. A rating of 50 indicates that the number of positive or good responses received from the builders is about the same as the number of negative or poor responses. Ratings higher than 50 indicate more positive or good responses.