US Homebuilder Confidence Holds Steady In NovemberNov 16th, 2016 | By Sarah Glenn | Category: Economic Indexes
By ALEX VEIGA, AP Business Writer
U.S. homebuilders’ confidence held steady this month, though their expectations for sales into next year dimmed slightly.
The National Association of Home Builders/Wells Fargo builder sentiment index released Wednesday was unchanged at 63. That’s two points below September’s reading, which was the highest in nearly a year, and up one point from a year ago.
Readings above 50 indicate more builders view sales conditions as good rather than poor. The index has been above 60 the past three months after hovering in the high 50s much of this year.
The latest builder sentiment index is in line with what analysts polled by FactSet were expecting.
Builders’ view of current sales held steady from last month, while a gauge of traffic by prospective buyers edged higher. But their outlook for sales over the next six months declined slightly.
Even so, builders remain optimistic overall about new home sales, which are running ahead of last year’s pace.
“Ongoing job creation, rising incomes and attractive mortgage rates are supporting demand in the single-family housing sector,” said Robert Dietz, the NAHB’s chief economist. “This will help keep housing on a steady, upward glide path in the months ahead.”
Sales of new U.S. homes hit a seasonally adjusted annual rate of 593,000 units as of September, up nearly 30 percent from a year earlier. October new-home sales figures are due out next week.
In all, sales of new homes were up 13 percent through the first nine months of this year compared to the same period in 2015.
A healthy job market and low interest rates have bolstered demand for new homes and fueled construction of single-family homes this year.
Still, builders complain new construction is being hampered by a shortage of skilled labor and rising costs for ready-to-build land parcels in many markets.
This month’s builder index was based on 325 respondents.
A measure of current sales conditions for single-family homes held steady at 69, while a gauge of traffic by prospective buyers rose one point to 47. Builders’ view of sales over the next six months fell two points to 69.
On a regional basis, the index found builder sentiment improved in the Northeast, Midwest and West, but was unchanged in the South.
Though new homes represent only a fraction of the housing market, they have an outsized impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to NAHB data.