US Builder Confidence Trends Higher in October

On Thursday, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) showed that builder sentiment in the market for newly built single-family homes posted a reading of 43 in October, up 2 points from 41 in September. This marks the second consecutive increase.

NAHB points out that the share of builders cutting prices held steady at 32% in October, the same as last month. Meanwhile, the average price reduction returned to the long-term trend of 6% after dropping to 5% in September. The use of sales incentives was 62%, up slightly from 61% in September.

All three HMI indices were up in October:

• The index charting current sales conditions rose 2 points to a reading of 47.
• The component measuring sales expectations in the next six months increased 4 points to a reading of 57.
• The gauge charting traffic of prospective buyers posted a 2-point gain to a reading of 29.

The three-month moving averages for regional HMI scores were as follows:

• The Northeast increased 2 points to a reading of 51.
• The Midwest edged 2 points higher to a reading of 41.
• The South was unchanged at a reading of 41.
• The West increased 3 points to a reading of 41.