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Builder Confidence Index Static in September 09-20-13 | News

Builder Confidence Index Static in September

The NAHB index measuring homebuilder confidence in the single-family housing market remained at 58 in September following a one-point downward revision in August. The index has reported a positive outlook on the market since June, but recent increases in mortgage rates could be spooking potential homebuyers, leading to concern within the industry.

Builder confidence in the new single-family home market held steady at 58 in September following four consecutive months of improvements, according to the latest National Association of Home Builders (NAHB) report.

The index component measuring sales expectations in the next six months declined three points to 65, and the component gauging current sales conditions held unchanged at 62, though both scores still indicate a positive overall outlook. The component gauging traffic of prospective buyers increased one point, to 47, the highest since October 2005.

The scores are combined to calculate the index, in which any number over 50 indicates that more builders view conditions as good than poor.

"While builder confidence is holding at the highest level in nearly eight years, many are reporting some hesitancy on the part of buyers due to the sharp increase in interest rates," said NAHB Chairman Rick Judson. "Home buyers are adjusting to the fact that, while mortgage rates are still quite favorable on a historic basis, the record lows are probably a thing of the past."

Expanded builder confidence data can be found at nahb.org/hmi.