Builders’ confidence in the market for new single-family homes increased as the National Association of Home Builders' housing market index climbed to 68 in October from an unrevised 64 in September.
IFR's poll of economists predicted the index would be 64.
“This month’s report shows that home builders are rebounding from the initial shock of the hurricanes,” NAHB Chairman Granger MacDonald said. “However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages.”
“It is encouraging to see builder confidence return to the high 60s levels we saw in the spring and summer,” according to NAHB Chief Economist Robert Dietz. “With a tight inventory of existing homes and promising growth in household formation, we can expect the new home market continue to strengthen at a modest rate in the months ahead.”
Derived from a monthly survey that NAHB has been conducting for 30 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 jumped to 75 from 70, the sales expectations index for the next six months increased to 78 from 73; and the traffic of prospective buyers index crept to 48 from 47.