by Calculated Risk on 10/16/2018 10:06:00 AM
Tuesday, October 16, 2018
The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 68 in October, up from 67 in September. Any number above 50 indicates that more builders view sales conditions as good than poor.
From NAHB: Builder Confidence Rises One Point in October, Remains at Summer Levels
Builder confidence in the market for newly-built single-family homes rose one point to 68 in October on the NAHB/Wells Fargo Housing Market Index (HMI). Builder confidence levels have held in the high 60s since June.Click on graph for larger image.
“Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” said NAHB Chairman Randy Noel. “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.”
“Favorable 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.”
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.
This graph show the NAHB index since Jan 1985.
This was slightly above the consensus forecast, and a solid reading.