Builder Confidence At 15-month High in September

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index ROSE one point in September to 68 (out of 100);
  • The short-term outlook for home sales ADDED two points but the outlook for sales in six months FELL a point;
  • The gauge of buyer traffic was unchanged from August;
  • The Index for August was REVISED UP one point to 67.
  • By region, builder confidence ROSE in three of the four Census regions and unchanged in the fourth, the Midwest.


  • The total index was UP year-year for the first time since September 2018;
  • The overall index hit its highest level since June 2018.

Data Source: National Association of Home Builders

Image result for home building

Builder confidence continues to try to put the lie to sales and permit statistics showing weakness in home building Despite weakness in new home sales and new residential permits and starts, builders remain confident about residential housing markets.

The most recent Census report on housing permits and starts, for example, showed starts down 4.0 percent month-month and essentially flat to 2018. It was the third straight month housing starts had fallen.

And the most recent report on new home sales showed them down 12.8 percent month-month, the steepest month-month decline in six years.

Nonetheless. the Housing Market Index computed by the National Association of Home Builders showed builder confidence at its highest point in over a year, rising for the third month in a row. Even the first reading for August was revised up for the most recent, September, report.

Builders are bullish about near-term sales though not as sanguine about sales six months out and are seeing relatively strong buyer traffic.  

At least that’s what they’re telling the National Association of Home Builders in its monthly three question survey which checks views about the current sales market for new homes, views of the market six months out and the flow of buyer traffic to model homes.

Builder sentiment continues to outpace the reality of weak new home sales however. And, sales are likely to take their seasonal dip as autumn approaches. The months between school semesters are said to be the strongest months for home sales as parents try to settle in new homes before a new school begins.

The NAHB data showed a distinct regional tilt with confidence jumping in the Northeast and to a lesser degree in the South but slipping in the Midwest and West. Confidence hit 65 (out of 100) in the Northeast, matching May with the highest reading since 2005.

Indeed, recent news reports suggest builders may be dusting off incentives to, improving again in July although new home sales for May (the last reporting month) fell and new home sales sit at their lowest point of the year.

The builders may be encouraged by continued low mortgage rates as reported by Freddie Mac in its weekly survey. Freddie Mac reported last week the average rate for a 30-year fixed rate loan was 3.56 percent, down from 4.60 a year ago. That drop of 1.04 percentage points would reduce the monthly payment on a 30-year $300,000 loan to $1,363.94 from $1,537.93 a savings of about $175 per month.

Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.

0 Responses to “Builder Confidence At 15-month High in September”

Comments are currently closed.