Builder confidence continued to rise in September, reaching its highest level since October 2005. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) reached 62 for the month, one point higher than August.
Two of the three HMI components increased in September. The index measuring buyer traffic rose two points to 47, and the component gauging current sales conditions climbed one point to 67. Meanwhile, the index for sales expectations in the next six months dropped from 70 to 68.
'Our members continue to tell us that they are concerned about the availability of lots and labor.'
While NAHB Chairman Tom Woods said the level showed progress, he cautioned that “our members continue to tell us that they are concerned about the availability of lots and labor."
"NAHB is projecting about 1.1 million total housing starts this year," said NAHB Chief Economist David Crowe in a statement. "Today's report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year."
The HMI is derived from a monthly survey that gauges builder perceptions of current single-family home sales and sales expectations for the next six months; any number over 50 indicates that more builders view conditions as good than poor. Detailed information on the HMI can be found on the NAHB website.
