Homebuilders remain confident in market

Confidence in the newly-built single-family home market rose one point among homebuilders for October.

The National Association of Home Builders/Wells Fargo Housing Market Index found that builders’ confidence hit 68 this month, maintaining the summer average, which has typically been in the high 60s.

The index also checks current sales conditions, along with expectations for the next six months. Both remain favorable, with the index for current sales conditions hitting 74, a one point increase, and the expectations for the next six months reaching 75, also an increase of one point. The index for buyer traffic increased even more, rising from 49 to 53 in one month for October.

“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.”

While lower than the national average, the Northeast region’s confidence index, for a three-month moving average, did rise three points, reaching 57. The South saw a one point rise to  71, while the West had the highest average, at 74. In the Midwest, the confidence decreased by two points, reaching 57.

“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.”