Confidence among U.S. homebuilders rose to an 11-month high in September, indicating the housing market will continue to advance, according to data Monday from the National Association of Home Builders/Wells Fargo.
- Builder sentiment gauge increased to 65 (forecast was 60) from a revised 59; readings greater than 50 indicate more respondents reported good market conditions
- Gauge of prospective buyer traffic rose to 48, the highest since November, from 44
- Measure of six-month sales outlook climbed to an 11-month high of 71 from 66
- Index of current sales rose by 6 points to 71, the best reading since October 2005
Mortgage rates near historic lows and steady job gains are providing firm support for housing demand, providing a boost to economic growth in all but two quarters since the start of 2014. The report indicated builders are confident they will be able to sell more homes but shortages of buildable land and experienced workers are keeping the market from making even greater strides.
“With the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them,” NAHB chief economist Robert Dietz said in a statement. “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.”
- Builder sentiment improved in all four U.S. regions
- In the West, builders were more confident than at any time since October 2005
- Index of sentiment in the South was the strongest since November 2005