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Note From the Author
"The best economist is an active market participant: one who practices what he preaches." David Brady is a bond portfolio and currency risk manager who has spent several years working in the financial sector, both in Europe and the States. "Awareness of the state of the economy should be the starting point for any investment decision. Analyze economic statistics and judge for yourself what is happening in the U.S. economy today and tomorrow."

Note From the Author

"The best economist is an active market participant: one who practices what he preaches." David Brady is a bond portfolio and currency risk manager who has spent several years working in the financial sector, both in Europe and the States. "Awareness of the state of the economy should be the starting point for any investment decision. Analyze economic statistics and judge for yourself what is happening in the U.S. economy today and tomorrow."

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Tuesday, 20 January 2009

S&P Index of US Home Builders

S&P Index of US Home Builders is an important indicator of conditions in the housing sector because it is an equity index which reflects the views of investors in housing stocks. It is one of the earliest and best indicators of prospects for the housing sector.

Market Effect: Not Applicable - this is a market indicator.
Indicator of Housing Sector Conditions: Very Strong.

New Home Sales

New Home Sales is an important indicator of conditions in the housing sector because although new homes comprise only 15% of all home sales, the sales are recorded when a contract is signed and are considered a leading indicator of the housing data. Its significance is undermined somewhat by its volatility.

Market Effect: Moderate - Weak
Indicator of Housing Sector Conditions: Moderate

Existing Home Sales

The figure for Existing Home Sales is the key housing sector indicator because existing homes comprise a full 85% of all home sales. The data is slightly lagging because it is based on when buyers close the deal on properties, up to two months after the contract has been signed.

Market Effect: Moderate - Weak
Indicator of Housing Sector Conditions: Moderate

Housing Starts

Housing Starts reflect the number of homes begun construction. The data is somewhat lagging as it represents the supply of new homes being brought on to the market. Demand for new homes typically starts to fall before supply.

Market Effect: Moderate - Weak
Indicator of Housing Sector Conditions: Moderate - Weak

Home Builders' Index

The National Association of Home Builders' Association Index is a survey of the largest home builders in the country and is a good barometer of business conditions in that sector.

Market Effect: Weak
Indicator of Housing Sector Conditions: Strong

Disclaimer: The information provided has been compiled by David Brady, author of this web site. This material is based on data obtained from sources considered to be reliable; it is not guaranteed as to accuracy and does not purport to be complete. The ideas are those of David Brady and his alone. This information is not intended to be used as the primary basis of investment decisions. Because of individual client requirements, it should not be construed as advice designed to meet the particular investment needs of any investor. This is neither an offer to sell nor a solicitation of an offer to buy any securities. Please consult a certified investment advisor before deciding to buy or sell any securities.