Builder optimism in the marketplace for newly-built single-family houses climbed one point to 68 in September in an upwardly revised August reading of 67, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI) released now. Sentiment amounts have held at the mid- to upper 60s because May and September’s reading matches the maximum level since last October.

“Low interest rates and solid demand continue to fuel builders’ sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor,” stated NAHB Chairman Greg Ugalde, a house builder and developer from Torrington, Conn.

“Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,” stated NAHB Chief Economist Robert Dietz. “However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China. NAHB’s Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.”

Derived by a monthly survey that NAHB has been running for 30 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family house sales and sales expectations for the next six months as “good,” “fair” or “poor.” The poll also asks builders to rate traffic of prospective buyers since “high to very high,” “average” or “low to very low.” Scores for each component are then utilized to calculate a seasonally adjusted index where any number over 50 suggests that more builders view conditions as good than poor.

The HMI index gauging current sales requirements rose 2 points to 75 as well as also the component measuring traffic of potential buyers kept steady in 50. The measure calculating sales expectations at the next six months dropped one point to 70.

Looking in the moving averages for regional HMI scores, the Northeast published a two-point profit to 59, the West was up two points to 75 along with also the South transferred one stage greater to 70. The Midwest was unchanged at 57.

Editor’s Note: The NAHB/Wells Fargo Housing Market Index is purely the product of NAHB Economics, and isn’t seen or influenced by any outside party prior to being published to the general public. HMI tables are located in nahb.org/hmi. More data on home data can also be available at housingeconomics.com.

Jeff Thornton