The National Association of Home Builders asks its members to gauge their perceptions of current single family home sales and sales expectations for the next six months, and to rate traffic of prospective buyers. Scores from each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor. The index is still under 50, so the majority of home builders still see poor conditions, but at the rate things are improving, we could see a majority rating conditions as good in a few months.
This next chart shows an index of the stocks of major home builders, and it confirms that things have improved noticeably of late. The S&P 500 Homebuilders ETF (XHB) has doubled since its low of last October.
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