Following a strong bump-up in August, builder confidence in the market for new single-family homes edged down this month but remained within the narrow range maintained since this time last year, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index. The seasonally adjusted monthly gauge of builder sentiment registered a 68 for September, down three points from its month-ago reading.
“This is exactly on par with the index’s year-ago standing, and shows that, in the midst of a particularly devastating hurricane season, builder confidence is essentially unshaken,” said Bobby Rayburn, NAHB president, and a home and apartment builder from Jackson, Miss.
“Favorable financing conditions, sound house-price performance and reviving consumer confidence continue to propel the single-family market,” agreed NAHB Chief Economist David Seiders. “Builders are still reporting healthy demand for new homes across most markets, and that bodes well for sales in coming months.”
The NAHB/Wells Fargo HMI is derived from a monthly survey of builders that NAHB has been conducting for almost 20 years. Home builders are asked to rate current sales of single-family homes as “good,” “fair” or “poor.” They are also asked to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for responses to each component are used to calculate a seasonally adjusted index, where any number over 50 indicates that more builders view sales conditions as good than poor.
Following a four-point surge to 71 in August, the HMI dropped back three points to the same range it has been in for the past year. Two out of three of the component indexes – the one gauging current sales conditions and the one gauging traffic of prospective buyers – fell four points this time around, to 73 and 52, respectively. The component gauging expected sales in the next six months declined three points to 75. All are within close range of their year-ago standings in September 2003.
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