Builder confidence was at an all-time high in September, said the National Association of Home Builders. The NAHB/Wells Fargo Housing Market Index (HMI) rose five points to 83, exceeding last month’s previous high of 78. The index is a strong signal that housing is leading the economic recovery, said NAHB.
“Historic traffic numbers have builders seeing positive market conditions, but many in the industry are worried about rising costs and delays for building materials, especially lumber,” said NAHB Chairman Chuck Fowke. “More domestic lumber production or tariff relief is needed to avoid a slowdown in the market in the coming months.”
NAHB Chief Economist Robert Dietz said lumber prices are up 170 percent since mid-April, adding more than $16,000 to the price of the average single-family home.
“The suburban shift for home building is keeping builders busy, supported on the demand side by low interest rates,” said Dietz. “In another sign of this growing trend, builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating.”
The HMI is composed of three indices, all of which were at their highest readings ever in September. The current sales condition index rose four points to 88, sales expectations for the next six months rose six points to 84 and the index measuring traffic of prospective buyers gained nine points for a reading of 73.
The HMI regional three-month moving average scores were: Northeast 76 (+11), Midwest 72 (+9), South 79 (+8) and West 85 (+7).
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