Economic Snapshot: Builder confidence at highest level in 10 years

The housing market certainly looks positive this week, at least from a builder’s perspective. The National Association of Home Builders/Wells Fargo Housing Market Index reported that builder confidence rose this month to a decade high.

Builder confidence increased one point to 62 in September, making this the highest reading for the index since October 2005.

“NAHB is projecting about 1.1 million total housing starts this year,” said NAHB Chief Economist David Crowe. “Today’s report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.”

Two of the three HMI components posted gains in September. The index measuring buyer traffic rose two points to 47 and the component gauging current sales conditions increased on point to 67. The index charting sales expectations in the next six months dropped two points to 68.

“The HMI shows that single-family housing is making solid progress, said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo. “However, our members continue to tell us that they are concerned about the availability of lots and labor.”

Looking at three-month moving averages for regional HMI scores, the West, Midwest and South each posted a one-point gain to 64, 59 and 64, respectively. The Northeast dropped one point to 46.

Housing starts

Privately owned housing starts were at a seasonally adjusted rate of 1,126,000 in August. This is 3.0 percent below the revised July estimate of 1,161,000 but is 16.6 percent above the August 2014 rate of 966,000.

Single-family housing starts were at a rate of 739,000 in August, which is 3.0 percent below the revised July figure of 762,000.

Privately owned housing completions were at a seasonally adjusted annual rate of 935,000 in August. This is 6.1 percent below the revised July estimate of 996,000 but 3.3 percent above the August 2014 rate of 905,000.

Single family housing completions were at a rate of 646,000 in August, which is 1.6 percent above the revised July rate of 636,000.