Builder confidence rises in October
Oct. 17 – Builder confidence in the market for newly-built
single-family homes rose one point to 68 in October on the National
Association of Home Builders/Wells Fargo Housing Market Index (HMI).
Builder confidence levels have held in the high 60s since June.
“Builders are motivated by solid housing demand, fueled by a growing
economy and a generational low for unemployment,” said NAHB Chairman
Randy Noel, a custom home builder from LaPlace, La. “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.”
“Favourable 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.”
Derived from a monthly survey that NAHB has been conducting for 30 years,
the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of
current single-family home sales and sales expectations for the next six
months as “good,” “fair” or “poor.” The survey also 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 HMI index measuring current sales conditions rose one point to 74 and
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.
Looking at the three-month moving averages for regional HMI scores, the
Northeast rose three points to 57 and the South edged up one point to 71.
The West held steady at 74 and the Midwest fell two points to 57.
Editor’s Note: The NAHB/Wells Fargo Housing Market Index is strictly the
product of NAHB Economics, and is not seen or influenced by any outside
party prior to being released to the public. HMI tables can be found at
nahb.org/hmi. More information on housing statistics is also available at