A jump in builder confidence in the Northeast led the national level modestly higher this month. Behind the improvement were strong economic conditions and lower lumber prices.
October 2018’s Housing Market Index was determined to be a seasonally adjusted 68. An index above 50 is an indication that more builders view conditions as good than poor.
A one-point gain was made from the previous month, when the index fell to the lowest level in 12 months. But the the index was no different than in the same month last year.
The index, jointly produced by the National Association of Home Builders and Wells Fargo, was announced Tuesday.
“Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment,” NAHB Chairman Randy Noel said in the report. “Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable.”
One of three components that make up the index,
prospective buyer traffic, was 53, jumping four points from September. The component measuring current sales conditions inched up a point to 74. The component reflecting expectations over the next six months was also up a point, to 75.
On a three-month moving average, the index in the Northeast increased three points to 57, and the South’s index moved up one point to 71.
No change in the West left the index there at 74.
In the Midwest, a two-point decline left the index at 57.
