Declining material costs and a strong economy contributed to homebuilder confidence climbing one point to 68 in October, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
“Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” NAHB Chairman Randy Noel said. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.”
NAHB Chief Economist Robert Dietz said favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases.
“Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019,” Dietz said.
In October, all three HMI indexes experienced an increase. Current sales conditions inched up from 73 to 74 points, while buyer traffic climbed four points from 49 to 53. Lastly, expectations over the next six months rose from 74 to 75 points.
The three-month moving averages for regional HMI scores show the Northeast moved up three points from 54 to 57 points, the South increased from 70 to 71 and the West remained unchanged at 74 points, respectively. However, the Midwest declined two points from 59 to 57 points, respectively.