Confidence among builders in the market for newly-built single-family homes rose one point to 68 on a 0-to-100 scale in September, up from 67 in August and the highest point since October 2018, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
“Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor,” said NAHB chairman Greg Ugalde, a home builder and developer from Torrington, Conn.
The survey asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for 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 survey has been conducted for more than 30 years.
Looking at the three-month moving averages for regional HMI scores, the Northeast posted a two-point gain to 59, the West was also up two points to 75 and the South moved one point higher to 70. The Midwest was unchanged at 57.
The HMI index gauging current sales conditions increased two points to 75, while the component measuring traffic of prospective buyers held steady at 50. The measure charting sales expectations in the next six months fell one point to 70.
“Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” said NAHB chief economist Robert Dietz. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China.”
The slowdown in the manufacturing sector “is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas,” Dietz said.
More comprehensive data tables can be found on the Website at www.nahb.org/hmi.