The International Builders’ Show (IBS) has long been the stage where the industry’s most significant tools and insights make their debut. In 2014, Meyers Research launched the Meyers Index, a data-driven tool designed to give home builders a clearer picture of market conditions. More than a decade later, the principles behind that index remain central to how successful building companies navigate housing cycles. Understanding what the Meyers Index measured and why it mattered offers valuable lessons for any builder looking to make smarter, data-backed decisions.
The housing market does not move in straight lines. Builders who rely on gut instinct alone often find themselves caught off guard by shifting demand, rising material costs, or changing buyer preferences. The Meyers Index was built to solve that problem by tracking real-time data on new home construction, builder sentiment, and regional market activity. This article explores what the index measured, why indices matter for home builders, and how you can apply similar data analysis to your own building business.
What the Meyers Index Measured and Why It Mattered
The Meyers Index debuted at IBS 2014 as a proprietary tool that aggregated data from multiple sources to produce a single, actionable score for housing market health. Unlike broad economic reports that look at the national picture, the Meyers Index focused specifically on new home construction and local market conditions.
Core Components of the Index
The index tracked several key data points that directly affected home builders:
- Permit activity: The number of new building permits issued across key markets, a leading indicator of future construction volume
- Builder sentiment surveys: Direct feedback from builders on current market conditions, buyer traffic, and six-month outlooks
- New home sales data: Actual closed sales figures broken down by region and price point
- Inventory levels: The supply of new and existing homes available, measured in months of inventory
- Employment and demographic trends: Local job growth, population changes, and household formation rates that drive housing demand
Why a Dedicated Home Building Index Was Needed
Before the Meyers Index, builders largely relied on general economic indicators or the NAHB Housing Market Index. While valuable, these tools did not always capture the granular, market-specific data that builders needed for land acquisition decisions, pricing strategies, and production planning. The Meyers Index filled that gap by providing what builders needed most: actionable intelligence they could apply to their specific markets.
As noted in our article on decoding the housing market index for home builders, understanding builder confidence trends helps companies anticipate shifts before they appear in sales reports. The Meyers Index took this concept further by layering in hard data on permits and closings.
How Market Indices Help Home Builders Make Smarter Decisions
A well-constructed market index does more than summarize data. It gives builders a framework for decision-making across every phase of the business.
Land Acquisition and Timing
Knowing where a market sits in the housing cycle is critical for land acquisition. An index that tracks permit trends, sales velocity, and inventory can signal when it is time to buy land and when it is better to wait. Builders who enter a market during an upswing capture lower land costs and benefit from rising prices. Those who buy at the peak often struggle with slim margins.
Product Mix and Pricing Strategy
Market data also informs what type of homes to build and at what price point. An index that breaks down sales by price tier reveals whether demand is strongest for entry-level homes, move-up product, or luxury builds. Builders who align their product mix with actual market demand sell faster and carry less finished inventory.
Production Planning and Risk Management
Production builders need to match starts with projected closings. An index that tracks builder sentiment alongside hard data helps avoid the trap of overbuilding when confidence is high but demand is softening. The ability to use housing starts data to make smarter business decisions is a skill that separates consistently profitable builders from those who ride the boom-and-bust cycle.
Key Housing Market Indicators Every Builder Must Track
While the Meyers Index was a proprietary tool, the indicators it tracked are available to every builder. The key is knowing which metrics matter and how to interpret them together.
| Indicator | What It Measures | Why Builders Should Track It |
|---|---|---|
| Building Permits | Number of permits issued monthly | Leading indicator of future construction activity |
| New Home Sales | Closed sales of newly built homes | Direct measure of home buyer demand |
| Months of Supply | Inventory divided by monthly sales pace | Shows whether the market favors buyers or sellers |
| Builder Confidence Index | Survey of builder sentiment on current and future conditions | Captures industry outlook before it shows up in hard data |
| Housing Starts | Number of new construction projects started | Measures production volume and industry momentum |
| Employment Growth | Local job creation across all sectors | Strongest driver of housing demand over time |
| Mortgage Rates | Average interest rate on new home loans | Directly affects home buyer purchasing power |
How to Read the Signals
No single indicator tells the full story. The power of an index like Meyers lies in how it combines signals. For example:
- Rising permits + rising builder confidence + falling inventory: Strong market. Consider increasing starts and acquiring new lots.
- Falling permits + rising inventory + falling builder confidence: Cooling market. Slow starts, reduce spec inventory, and preserve cash.
- Rising employment + rising permits + flat inventory: Growing market with tight supply. Good conditions for pricing power and faster sales.
- Rising mortgage rates + falling builder confidence + flat sales: Caution zone. Maintain flexibility in pricing and reduce speculative building.
These patterns are explored in greater depth in our guide to five housing market indicators every home builder must track, which breaks down how each metric behaves across different market phases.
Applying Market Data to Improve Your Building Business Strategy
Having access to data is not enough. The builders who succeed are those who build systems around that data and use it to drive decisions at every level of the organization.
Step 1: Establish a Regular Data Review Cadence
Market data changes monthly, and quarterly reviews are too slow for fast-moving markets. Set a monthly cadence to review the key indicators listed above. Assign one person on your team to compile the data and present it at a standing operations meeting. Consistency matters more than perfection. Over time, you will develop an intuitive sense for how your local market behaves.
Step 2: Benchmark Against Your Own Performance
External market data is most powerful when compared against your own internal metrics. Track your absorption rate, cancellation rate, and average sales price alongside market-level data. When your performance diverges from the market trend, investigate whether the issue is your product, your pricing, or your sales process.
Step 3: Use Indices to Guide Land Strategy
Land is the most expensive and least flexible input in home building. Use market data to guide when and where you buy. Markets that show consistent permit growth, rising employment, and declining inventory are strong candidates for land investment. Markets where builder confidence is falling and inventory is rising call for caution.
The NAHB Improving Markets Index provides one model for tracking which metro areas are gaining economic and housing momentum. Builders who monitor such indices can spot emerging opportunities before competitors do.
Step 4: Train Your Team to Think in Data
The best market index in the world will not help if only the owner understands it. Train your sales team, your production managers, and your acquisition staff on the basics of market analysis. When everyone in the company understands why starts slow down in certain conditions or why pricing must adjust when inventory rises, the entire organization moves faster and makes fewer mistakes.
Market data should inform every decision from land acquisition to pricing to product design. The Meyers Index showed the industry what was possible when data was collected, analyzed, and presented in a format builders could actually use. Today, builders who embrace that same mindset have a clear advantage over those who still rely on instinct alone. The housing market will always have cycles. The question is whether you will see them coming or only recognize them in the rearview mirror.