Builder confidence in the market for newly built, single-family homes rose for a fourth consecutive month in September to a nine-year high.
In September The HMI (Housing Market Index) was reported at a level of 59.00 up from 55.00 last month and up from 57.00 one year ago. Anything above 50 is considered to be a positive sentiment. This is the highest level since November 2005.
To put this September HMI report into perspective, in the period following the housing crash in 2009, HMI sentiment around was all the way down to 17.
Looking forward, the estimate of single-family sales for the next six months rose to a 13-month high of 67 from 65
Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up, which is a positive sign that the housing market is moving in the right direction.
A firming job market is helping as are low interest rates. Mortgage rates are hitting new lows. Mortgage Company Freddie Mac said that the nationwide average for 30-year fixed-rate mortgages dropped to 3.97 percent, down from 4.12 – the lowest level since June 20, 2013.
In October U.S. homebuilders’ confidence fell slightly after four months of gains which had pushed the indicator to the highest point in nine years.
Analysts said readings in the mid-50s were in line with the current modest pace of recovery in housing.
Economists said the small decline did not alter their views that housing prospects remained favorable in coming months.
By region of the country, builder sentiment in October was highest in the Midwest with a reading of 59 followed by readings of 58 in the South, 57 in the West and 41 in the Northeast.