Homebuilder confidence slips in October

Homebuilder confidence slipped last month after a four-month streak of gains, but sentiment remains largely positive about the housing market’s growth. 

Builder optimism in the market for newly built single-family homes fell five points to 54, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) showed on Thursday.

{mosads}Any number above 50 indicates that more builders view conditions as good than poor.

“After the HMI posted a nine-year high in September, it’s not surprising to see the number drop in October,” said David Crowe, NAHB’s chief economist.

“However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market.”

All three index components declined in October.

The index gauging current sales conditions decreased six points to 57, the gauge measuring expectations for future sales fell three points to 64 and the component weighing traffic of prospective buyers dropped six points to 41.

“We are seeing a return to the mid-50s index level trend established earlier in the summer, which is in line with the gradual pace of the housing recovery,” said NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, Del.

“While there was a dip this month, builders are still positive about the housing market.”

Regionally, expectations remained flat in the Northeast (41) and Midwest (59). The South’s figure rose two points to 58 and the West registered a 57, a one-point loss.