It’s been nearly a decade since builders were this confident in the market for newly built, single-family homes.
Builders’ confidence rose for the fourth consecutive month in September, according to new data from National Association of Home Builders (NAHB). It’s a strong signal that the housing industry is gaining more momentum.
To create its NAHB/Wells Fargo Housing Market Index, the association surveys builders to gauge their perceptions of current single-family home sales, as well as expectations for the next six months. The survey also asks builders to rate traffic of prospective buyers. Their responses are used to calculate an index, in which anything above 50 signals a positive outlook.
The index rose four points to 59 in September—marking the highest level since November 2005. Confidence improved on all fronts: current sales conditions, prospective buyers, and future sales. Furthermore, builder confidence rose across every region of the country in September.
“Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction,” NAHB Chairman Kevin Kelly said.
A separate report from the Commerce Department found that construction of new homes in August dipped following a massive surge in July. Despite that month-to-month decline, the August rate was still 8 percent higher rate than a year earlier, Forbes noted.