Strength in new buyer traffic and optimism in the East helped drive up the level of home builder confidence this month.
A measure of the level of confidence among U.S. home builders, the Housing Market Index, landed at 60 in August.
An index reading of more than 50 is an indication that there are more home builders
who view conditions as good than poor.
The index, which is jointly
maintained and published by the National Association of Home Builders and Wells Fargo, increased from a downwardly revised 58 in July.
“Builder confidence remains solid in the aftermath of weak GDP reports that were offset by positive job growth in July,” NAHB Chief Economist Robert Dietz said in the report. “Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year.”
Still, optimism among home builders fell short of this month last year, when the index was 61.
Among three subindices reflected in the index is current sales conditions, which climbed two points from a month earlier to 65 in August 2016.
The subindex for the the second component, sales expectations for the next six months, rose a single point from July to 67.
But the component that measures current buyer traffic retreated a point to 44 this month.
At a regional level, the three-month moving average for the HMI in the South increased two points from last month to 63.
A two-point gain
in the Northeast left that index at 41 as of August.
In the West, the HMI was 69 in August, the same as the prior month.
The only region to suffer a decline was the Midwest, where the index fell two points from July to 55.
