After reaching the highest level in nearly a year last month, the degree of home builder confidence has retreated thanks mostly to current sales conditions.
The seasonally adjusted Housing Market Index, which provides insight into how builders view market conditions for new houses, was 63 in October.
That turned out to be a two-point decline from the previous month, when the index ascended to its the highest level it has been since October 2015.
The index, which is jointly reported by the National Association of Home Builders and Wells Fargo, also came up short versus the same month last year, when it was an upwardly revised 65.
“Even with this month’s drop, builder confidence stands at its second-highest level in 2016, a sign that the housing recovery continues to make solid progress,” NAHB Chairman Ed Brady said in the report.
But Brady
cautioned that a shortage of lots and labor continues to plague home builders in many markets.
One of three components that make up the HMI, the current sales index, dropped two points from September to 69. The buyer traffic index slipped a point to 46.
But a one-point increase was recorded for sales expectations over the next six months, leaving that index at 72.
In the Northeast, the three-month moving average gained a point to 43, while a one-point increase left the Midwest’s index at 56 and the South’s index at 65.
In the
West, the moving average climbed two points to 75.
