- Sales conditions increased 2 points to 90
- Sales expectations over next 6 months increased 3 points to 88
- Buyer traffic remained at last month’s high of 74
The weather outside may be chilling off but there is no cooling going on when it comes to buyer demand. According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), builder sentiment jumped to 85, a record high for the second month in a row. (Anything over 50 is considered to be positive.)
All three components of this builder sentiment index either set new record highs or maintained last month’s record highs. Current sales conditions hit 90 points, up 88 points in September. Sales expectations over the next six months hit 88 points, 3 points higher than in September. Buyer traffic maintained its score from last month at 74.
NAHB Chairman Chuck Fowke, a builder from Tampa, said, “Traffic remains high and record-low interest rates are keeping demand strong as the concept of ‘home’ has taken on renewed importance for work, study and other purposes in the COVID era.”
Fowke also cautioned markets about increasing challenges in the homebuilding industry such as the difficulty of building affordable homes within time frames that can meet strong buyer demand in light of shortages in finished lots, labor, lumber and other materials and supplies.
In terms of three-month averages for regional HMI scores…
- Northeast increased 6 points to 82
- Midwest increased 3 points to 75
- South increased 3 points to 82
- West jumped 5 points to 90
The NAHB chief economist, Robert Dietz, said, “The housing market continues to be a bright spot for the economy, supported by increased buyer interest in the suburbs, exurbs and small towns. New single-family home sales are outpacing starts by a historic margin. Bridging this gap will require either a gain in construction volume or reductions in available inventory, which is already at a historic low in terms of month’s supply.”
Meanwhile, in July, US single-family housing permits surged +24.3% y/y. This marks the highest level of housing permits since March, 2007. Single-family housing starts jumped +22.3% y/y in July, according to the US Commerce Department. This was the highest level of housing starts since June 2007.
Thanks to CNBC, ZeroHedge and the National Association of Home Builders.