by Bill McBride on 9/19/2016 10:05:00 AM
Monday, September 19, 2016
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 65 in September, up from 59 in August. Any number above 50 indicates that more builders view sales conditions as good than poor.
From the NAHB: Builder Confidence Surges in September
Builder confidence in the market for newly built, single-family homes in September jumped six points to 65 from a downwardly revised August reading of 59 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released today. This marks the highest HMI level since October 2015.Click on graph for larger image.
“With the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them,” said NAHB Chief Economist Robert Dietz. “Though solid job creation and low interest rates are also fueling demand, builders continue to be hampered by supply-side constraints that include shortages of labor and lots.”
All three HMI components moved higher in September. The component measuring current sales expectations rose six points to 71 and the gauge charting sales expectations in the next six months increased five points to also stand at 71. The index measuring traffic of prospective buyers posted a four-point gain to 48.
The three-month moving averages for HMI scores posted gains in three out of the four regions. The Northeast and South each registered a one-point gain to 42 and 64, respectively, while the West rose four points to 73. The Midwest was unchanged at 55.
This graph show the NAHB index since Jan 1985.
This was above the consensus forecast of 60, and is another solid reading.