Builder confidence in the market for newly built, single-family homes rose for a fifth consecutive month in September to a level of 40 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This latest three-point gain brings the index to its highest reading since June of 2006.
‘This fifth consecutive month of improvement in builder confidence provides further assurance that the housing market is moving in a positive direction, but there's still a long way to go on the road to recovery and several obstacles are slowing our progress,’ says NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. ‘In particular, unnecessarily tight credit conditions are preventing many builders from putting crews back to work – which would create needed jobs – and discouraging consumers from pursuing a new-home purchase.’
All three HMI components posted gains in September. While the component gauging current sales conditions increased four points to 42, the component gauging sales prospects in the next six months rose eight points to 51, and the component measuring traffic of prospective buyers edged up one point to 31.
Builder confidence also rose across every region of the country in September. Looking at the three-month moving average for each region, the Midwest and West each registered five-point gains, to 40 and 43, respectively, while the South posted a four-point gain to 36 and the Northeast posted a two-point gain to 30.