Builder confidence in the market for new single-family homes spiked to a 20-month high in October, according to the National Association of Home Builders.
Builder confidence rose three points to 71 in the latest NAHB/Wells Fargo Housing Market Index (HMI), with builder sentiment hitting its highest level since February 2018.
“The housing rebound that began in the spring continues, supported by low mortgage rates, solid job growth and a reduction in new-home inventory,” said Greg Ugalde, chairman of NAHB.
“The second half of 2019 has seen steady gains in single-family construction, and this is mirrored by the gradual uptick in builder sentiment over the past few months,” said Robert Dietz, NAHB chief economist. “However, builders continue to remain cautious due to ongoing supply-side constraints and concerns about a slowing economy.”
All HMI indices posted gains this month, according to the NAHB. The index gauging current sales conditions rose three points to 78, the component measuring sales expectations for the next six months rose six points to 76, and the index charting traffic of prospective buyers rose four points to 54.
All regions saw gains in their three-month HMI averages, according to the NAHB. The Northeast posted a one-point gain, rising to 60. The Midwest rose to 58, also up one point. The South and the West each posted three-point gains, rising to 73 and 78, respectively.
The HMI is derived from a monthly survey of builders that the NAHB has been conducting for more than 30 years. Any number over 50 indicates that more builders view conditions as good than poor.