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Homebuilder Confidence Rises to Highest Level in Nearly 10 Years

The National Association of Home Builders (NAHB)/Wells Fargo housing market index for September increased from a prior reading of 61 in August to 62, the highest reading since November 2005. The reading was higher than the consensus forecast of 61 from a Bloomberg survey of economists.

An index reading above 50 indicates that more builders view sales conditions as good than view them as poor.

The current sales conditions subindex added a point in September to reach 67, and the subindex that estimates prospective buyer traffic increased by two percentage points to 47. The sales expectations subindex remained slipped from 70 to 68.

NAHB’s chief economist said:

NAHB is projecting about 1.1 million total housing starts this year. Today’s report is consistent with our forecast, and barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year.

In the NAHB’s four regions, the three-month moving average index rose in the South rose from 63 to 64 in September and by a like amount to 64 in the West and to 59 in the Midwest. The moving averaged dropped a point to 46 in the Northeast.

The current interest rate for a conventional 30-year fixed mortgage loan for the year to date is 4.04% according to Mortgage News Daily. The 52-week range for conventional 30-year fixed loans is 3.55% to 4.26%.

The NAHB/Wells Fargo housing market index has remained above 50 since last July, following a sharp drop in the first half of 2014. Prior to mid-2013, the index had not risen to 50 since mid-2006.

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By Paul Ausick