Builder confidence for newly built, single-family houses surged in September, jumping six points to 65 from the August reading for the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). The September reading represents a high point for the index not seen since October 2015.
The tight inventory of new and existing homes, steady job creation and low interest rates are leading to demand and builders’ confidence for new construction, NAHB analysts said this morning. This enthusiasm could be dampened by labor shortages and constrained building lots, but the association expects to see positive growth in the index to carry into 2017.
The three components used in the HMI index rose in September, NAHB said. Current sales expectations increased six points to 71; sales expectations for the next six months jumped five points to 71; and the index measuring traffic of prospective buyers rose four points to 48. Likewise, the three-month moving averages by region either gained or stayed flat. The West increased four points to 73; the Northeast and South saw a point gain to 42 and 64, respectively; and the Midwest stayed unchanged at 55.
- Nicholas Stern, editorial associate