Homebuilder confidence surged in October, boosting the housing-market index from the National Association of Home Builders (NAHB) and Wells Fargo to its highest point since February 2018.
The index, compiled from a monthly survey that the NAHB has been carrying out for three decades, measures builder perceptions of current single-family home sales, as well as sales expectations for the next three months. Readings above 50 indicate that more builders view conditions as good rather than poor. October’s reading of 71 is up three points from September and represents a gain of 13 points since the start of this year.
Builder sentiment is up thanks to a housing rebound that began this past spring, according to NAHB Chairman Greg Ugalde. The bounce back is fueled by “low mortgage rates, solid job growth and a reduction in new-home inventory,” he said.
“The second half of 2019 has seen steady gains in single-family construction and this is mirrored by the gradual uptick in builder sentiment over the past few months,” NAHB chief economist Robert Dietz said. “However, builders continue to remain cautious due to ongoing supply-side constraints and concerns about a slowing economy.”
The overall rise in the housing-market index mirrors October growth in each of its component indices. The index that gauges current sales conditions moved upward three points to 78, while the index that measures sales expectations over the next three months jumped six points to 76. And the component index that charts the traffic of prospective buyers rose increased four points to 54.
