Economic Snapshot: Builder confidence at highest level since 2005

Builder confidence rose this month, returning to levels seen at the end of 2005 near the completion of the housing boom.

Builder confidence

The Housing Market Index rose three points to 64 in October, the highest the index has seen in nearly a decade. The index has held in the 60s since June 2015.

“With October’s three-point uptick, builder confidence has been holding steady or increasing for five straight months. This upward momentum shows that our industry is strengthening at a gradual but consistent pace,” said NAHB Chief Economist David Crowe. “With firm job creation, economic growth and the release of pent-up demand, we expect housing to keep moving forward as we start to close out 2015.”

Two of the three HMI components posted gains this month. The index measuring sales expectations in the next six months jumped seven points to 75 and the component gauging current sales conditions increased three points to 70. The index charting buyer traffic held steady at 47.

All four regions posted gains in October, when looking at three-month moving averages of regional HMI scores. The West posted a five-point gain to 69; the Northeast, Midwest and South each rose one point to 47, 60 and 65, respectively.

Housing starts

Privately owned housing starts were at a seasonally adjusted annual rate of 1,206,000 in September. This is 6.5 percent above the revised August estimate of 1,132,000 and 17.5 percent above the September 2014 rate of 1,026,000.

Single-family housing starts were at a rate of 740,000 in September, 0.3 percent above the revised August figure of 738,000.

Privately owned housing completion were at a seasonally adjusted annual rate of 1,028,000 in September, 7.5 percent above the revised August estimate of 956,000 and 8.4 percent above the September 2014 rate of 948,000.

Single-family housing completions were at a rate of 643,000 in September, 1.8 percent below the revised August rate of 655,000.

Existing home sales

Total existing-home sales increased 4.7 percent to a seasonally adjusted annual rate of 5.55 million in September. This was a strong rebound from the slightly downwardly revised 5.30 million in August. All four major regions experienced sales gains.

Existing-home sales are now 8.8 percent above the previous year and have increased YOU for 12 consecutive months.

The median existing-home price for all housing types was $221,900 in September, which is 6.1 percent higher than September 2014. This marks the 43rd consecutive month of YOY price gains.