Homebuilder confidence surged in September

Builder confidence surged in September to the highest level in nearly a year, a positive sign for the housing market and the nation’s economic growth.

Sentiment in the market for new, single-family homes jumped six points to 65 in September from August’s 59 reading, the highest index level since October 2015, according to the National Association of Home Builders/Wells Fargo Housing Market Index.

{mosads}”With the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them,” said Robert Dietz, NAHB’s chief economist.

“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.”

All three index components moved higher in September.

The component measuring current sales expectations rose six points to 71, the gauge charting sales expectations in the next six months increased five points to 71 and the component covering the traffic of prospective buyers posted a four-point gain to 48.

“As household incomes rise, builders in many markets across the nation are reporting they are seeing more serious buyers, a positive sign that the housing market continues to move forward,” said NAHB Chairman Ed Brady, a home builder and developer from Bloomington, Ill.

“The single-family market continues to make gradual gains and we expect this upward momentum will build throughout the remainder of the year and into 2017,” Brady said. 

Regionally, the three-month moving averages showed gains in three of the four regions. The Northeast and South each made one-point gains to 42 and 64, respectively, while the West rose four points to 73. The Midwest was unchanged at 55.