October Home Builder Confidence Up
MBA NewsLink Staff
Builder confidence in the market for newly built single-family homes rose slightly in October, the National Association of Home Builders reported yesterday.
The NAHB/Wells Fargo Housing Market Index rose by one point in October to 68. Builder confidence levels have held in the high 60s since June. The HMI index measuring current sales conditions rose one point to 74; the component gauging expectations in the next six months increased a single point to 75. Meanwhile, the metric charting buyer traffic registered a four-point uptick to 53.
Regional three-month averages saw the Northeast rise three points to 57, while the South edged up one point to 71. The West held steady at 74 and the Midwest fell two points to 57.
"Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment," said NAHB Chairman Randy Noel. "Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable."
"Favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases," said NAHB Chief Economist Robert Dietz. "Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019."
Last week the Mortgage Bankers Association reported mortgage applications for new home purchases fell by 9 percent in September from August but improved by 8.2 percent from a year ago.
The MBA Builder Application Survey estimated new single-family home sales at a seasonally adjusted annual rate of 643,000 units in September, a decrease of 3.9 percent from the August pace of 669,000 units. On an unadjusted basis, MBA estimated 50,000 new home sales in September, a decrease of 5.7 percent from 53,000 in August.
"Housing demand is still strong even as mortgage rates increase," said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting.