The National Association of Home Builders released the latest data on builder confidence yesterday. According to the October NAHB/Wells Fargo Housing Index (HMI), builder confidence is at its highest peak since June 2006. October’s gain of one point brings the index to 41.
“Tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets,” explained NAHB Chief Economist David Crowe, “… are the complicating factors that make it difficult for builder confidence to reach and surpass the 50-point mark, at which an equal number of builders view sales conditions as good versus poor.”
The index reflects builders’ reports of current single-family home sales and predictions of sales in the next six months as “good,” “fair” or “poor.” Surveyed builders rate prospective buyer traffic as “high to very high,” “average” or “low to very low.” “Prospective buyer traffic” ratings increased five points to their highest level since April 2006. The other two categories remained unchanged from September. The Northeast held steady while the rest of the country showed slight improvement.