US Homebuilder Sentiment Up On Solid Demand
October’s pickup in sentiment across the 3 sub-indexes and all 4 regions indicates the market for newly-built homes
Confidence among America’s homebuilders unexpectedly rose in October, registering the 1st gainer in 5 months amid falling lumber prices and solid demand, according to a report Tuesday from the National Association of Home Builders/Wells Fargo.
Highlights of Homebuilder Sentiment (October)
- Housing Market Index increased 1 point to 68 (estimate 66), according to a report Tuesday from the National Association of Home Builders/Wells Fargo.
- Current-sales gauge for single-family homes increased to 74 from 73; gauge of 6-month sales outlook rose to a 3-month high of 75 from 74
- Measure of prospective buyer traffic climbed to a 7-month high of 53 from 49
Key Takeaways from the Report
October’s pickup in sentiment across the 3 sub-indexes and all 4 regions indicates the market for newly-built homes may be regaining steam after a broad cooling in housing in recent months.
Tailwinds from tax cuts and one of the strongest job markets in decades continue to elevate sentiments and boost demand. Lumber prices have also fallen almost 50% since reaching a record in May.
At the same time, affordability continues to present challenges, with rising home prices and borrowing costs, the report said. Data on housing starts and existing-home sales due this week are both projected to show declines in September from the prior month.
The Official View
“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,” NAHB Chief Economist Robert Dietz said in a published statement. “Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019.”
Some Other Details
- Confidence gauge in Northeast climbed to a 13-year high of 64; reached 4-month high in West
- Measures of sentiment rose 2 points each in the Midwest, South
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