NAHB: Builder confidence experiences slip dip in October
Posted on Friday, October 17, 2014 at 8:37:58 AM
The short run of increased builder confidence has ended, as the National Association of Home Builders reported that October marked the first time in four months that confidence in new single-family homes decreased.
According to the NAHB/Wells Fargo Housing Market Index, builder confidence dropped to a level of 54, similar to conditions back in the summer. Even so, any number above 50 is an indication that more builders believe the market is favorable.
"While there was a dip this month, builders are still positive about the housing market," explained NAHB chief economist David Crowe. "After the HMI posted a nine-year high in September, it's not surprising to see the number drop in October. However, historically low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth of the housing market."
In addition, the U.S. Census Bureau and the Department of Housing and Urban Development released a joint report that showed more positive residential construction conditions. For example, building permits increased 1.5 percent from August to September. Housing starts reached a seasonally adjusted annual rate of more than 1 million, a 6.3 percent increase on a monthly basis.
Overall, these trends are good for buyers interested in residential financing. Better conditions could help improve affordability and inventory across the country.