Builder Confidence Edges Down in November; Remains Solid

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index SLIPPED one point in November to 70 (out of 100);
  • The outlook for sales in the near term fell two points to 76 and buyer traffic dipped one point to 53;
  • Despite the modest decline, the index of buyer traffic was above 50 – the dividing line between optimism and pessimism – for the fourth straight month
  • By region, builder confidence ROSE in three of the four Census regions, slipping only in the South where ot was down two points to a still-solid 74.


  • The month-month decline in the total index was only the second in 2019; the index fell two points to 64 in July;
  • The outlook for sales six months out is at its highest level since HMI is up 10 points since November 2018, the largest year-year gain since May 2017;
  • The year-to-date average index reading is 65, down from the year to date average of 68 last year.

Data Source: National Association of Home Builders (NAHB)

Image result for home building

Builder confidence remained solid in November despite a one-point slip to 70 (out of 100), the National Association of Home Builders reported Monday. The index has been over the break-even point, 50, for more than five years.

That said, the overall numbers for home construction continue to struggle against the sentiment measure. The pace of housing permits has fallen four times in the first nine months of the year (data for October is scheduled for release tomorrow), and the rate of housing starts has fallen in five of the first nine months of the year. (The pace of single-family starts though has increased seven times in the first nine months of 2019.)

Despite the improvement in single-family home starts in 2019 – the pace of starts fell in five of the 12 months in 2018), new home sales continue to struggle – down in four of the first nine months this year and the median price of a new single-family home fell to a 31-month low in September.

The number of residential construction jobs, according to the Bureau of Labor Statistics, grew 1.9 percent in the last year after growing 5.3 percent one year earlier.

A significant contributor to builder optimism assuredly is continued low -interest rates.

Year-to-date, the rate on a 30-year fixed-rate mortgage has averaged 3.97 percent, down ½ a percentage point from 4.53 percent a year ago. Last week, Freddie Mac reported, the average rate for a 30-year-fixed-rate loans was 3.75 percent down from 4.94 percent a year ago.

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.

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