The US Home Builder Confidence Index, which measures confidence in the market for new single-family homes, declined by five points to a seasonally adjusted level of 54 in October, the National Association of Home Builders said Thursday. A reading over 50 means most builders generally see positive conditions.
The index jumped in September to 59, its highest level since November 2005. October marked the index’s first decline since May, though it remained above the 50-point threshold for a fourth consecutive month.
“Historically low mortgage interest rates, steady job gains and significant pent-up demand all point to continued growth of the housing market,” said David Crowe, the NAHB’s chief economist.
Builder Confidence, US
The National Association of Home Builders/Wells Fargo builders confidence index fell from September in all four regions of the country. At 54, October’s reading was unchanged from the same month a year earlier.
While weaker than expected, “the October figure was not especially bad by the standards of this expansion,” J.P. Morgan Chase economist Daniel Silver said in a note to clients. “We think the housing market will likely continue to improve over time, but the related indicators have been mixed lately and there will likely continue to be ups and downs in the data throughout the housing recovery.”
Growth in construction of multifamily housing, such as apartment buildings, has outpaced construction of traditional single-family homes. Overall housing starts rose 8.6 per cent in the first eight months of the year compared with 2013. But new construction on single-family homes rose just 3.1 per cent, and building permits for single-family homes were flat from a year earlier, according to Commerce Department data.
Also Thursday, NAHB reported that its barometer of builders’ views on present sales of single-family homes fell six points to 57 in October. Meanwhile, a barometer of builders’ views on upcoming sales fell three points to 64. And a gauge of prospective-buyer traffic dropped six points to 41.