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NAHB Sentiment Index Hits Highest Levels Since May 2006

Home builder sentiment in the US rose from 41 to 46, which is the highest level since May 2006.  With this month's increase, the index is also getting closer and closer to the fifty threshold for growth for the first time since April 2006.  In the table to the right, we break down each of the components of the NAHB survey.  As shown, 'Future Traffic' remains the most positive at a level of 53, followed by "Present Sales" at 49.  Finally, at a level of 35, 'Traffic' remains the weakest component of the index.  Part of the weakness in the 'Traffic' component may have been due to slow activity in the Northeast due to Hurricane Sandy.

Weakness in the Northeast was also evident in the regional breakdown of the NAHB survey.  While the Midwest, South, and West were all close to or above 50 and increased during the month, the Northeast component actually saw a decline, dropping from 32 to 31.  While the Northeast was and continues to show weakness, rebuilding from last month's storm may provide a boost for building activity in the region during the months to come.

Below we provide historical charts for each of the components listed in the table above.  For each chart, recessions are highlighted with gray shading.

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