Builders' confidence in the market for new single-family homes steadied as the National Association of Home Builders' housing market index - a monthly gauge of builder sentiment - remained at 58 in September from a revised 58 in August, originally reported as 59.
Thomson Reuters' poll of economists predicted the index would be 59.
"While builder confidence is holding at the highest level in nearly eight years, many are reporting some hesitancy on the part of buyers due to the sharp increase in interest rates," according to NAHB Chairman Rick Judson. "Home buyers are adjusting to the fact that, while mortgage rates are still quite favorable on a historic basis, the record lows are probably a thing of the past."
"Following a solid run up in builder confidence over the past year, we are seeing a pause in the momentum as consumers wait to see where interest rates settle and as the headwinds of tight credit, shrinking supplies of lots for development and increasing labor costs continue," said NAHB Chief Economist David Crowe.
Derived from a monthly survey that NAHB has been conducting for 25 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as either "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 sales conditions as good than poor.
The current single-family home sales index held at 62, the sales expectations index for the next six months slid to 65 from 68; and the traffic of prospective buyers index rose to 47 from 46.