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The Latest ANALYTICS Or ig i nat ion s e r v ic i ng a na ly t ic s Findings from the NAHB indicated that confidence among homebuilders rose following the presidential elections. B uilder confidence continued its march to "break even," with the Housing Market Index (HMI), climbing five points in November to 46—its highest level since May 2006—the National Association of Home Builders (NAHB) reported recently. Economists had expected the index to edge up one point to 42. The HMI survey was conducted in the two weeks immediately following Hurricane Sandy and therefore reflects builder sentiment during that period. The November boost was due primarily to a surge in current sale activity, which rose from an index level of 41 (revised down from an originally reported 42) in October to 49 in November. The current sales index is at its highest level since March 2006. The upward assessment of homebuyer activity followed a five-point boost in buyer traffic in October. The traffic index remained at 35 in November, and the outlook for sales six months out rose by two points to 53 in November—its highest level since February 2007. The overall index is up 27 points in the last year, the strongest yearover-year gain in its almost 28-year history. The current sales index has risen 29 points in the last year, also a record. The traffic measure also registered a record year-year gain (21 points), while the index for the sales outlook is up 28 points year-over-year, shy of the 34-point record for an annual gain. That the overall index and two of its three components are showing record annual increases underscores the depths of the housing recession. The M Report | 59 se c on da r y m a r k e t Builder Confidence Hitting a High Note The index, built based on surveys conducted jointly by the NAHB and Wells Fargo, gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair," or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average," or "low to very low." Scores from each component are then used to calculate a seasonally adjusted index where any number more than 50 indicates that more builders view sales conditions as good than poor. The overall index has been under 50 since April 2006, 79 straight months. All four regions of the country posted gains in their HMI threemonth moving averages as of November. The South posted a four-point gain to 43, while the Midwest and West each posted three-point gains, to 45 and 47, respectively, and the Northeast posted a two-point gain to 31.