Builder confidence for newly built, single-family homes posted its sixth consecutive increase, a one-point month-over-month gain, according to the National Association of Home Builders and Wells Fargo. The gain brings the index to 41 from 40, which continues keeping the score at its strongest level since June 2006.
September posted a three-point gain and August posted a two-point increase. In July, there was a six-point spike.
NAHB Chairman Barry Rutenberg said that while builders report an increase in the number of serious buyers stopping by their sales offices, challenges remain.
“The concern is that, even though demand for new homes is rising,” he said in the release, “overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed.”
David Crow, NAHB’s chief economist, echoed Rutenberg’s sentiment, adding that difficult appraisals and limited inventory for buildable lots in some markets are additional challenges.
“These are the complicating factors that make it difficult for builder confidence to reach and surpass the 50 point mark,” he said.
Scores above 50 represent positive builder sentiments on the scale, which spans 1-100.
Broken down by current sales conditions and sales prospects for the next six months, the respective indices of 42 and 51 remained unchanged. The metric that measured traffic of prospective buyers climbed five points to 35, which is its highest level since 2006.
And broken down by region, the index gained two points in the Midwest and West for a respective 42 and 44 for the month. The South gained three points, bringing its index to 39 and the three-month average for the Northeast held steady at 29. — Zachary Kussin