The National Association of Homebuilders/Wells Fargo Housing Market Index dropped two points to 55 from September\’s revised reading of 57. Builder concerns over labor costs and availability and economic uncertainty related to the federal government shutdown were noted as factors contributing to the lower reading for October. Key Points Noted In October\’s HMI included:
- Builder confidence remains above 50, which indicates that more builders have a positive outlook on housing market conditions than those with negative sentiment.
- The October HMI cites pent-up buyer demand in markets throughout the US as a positive influence on October\’s reading.
- A spike in mortgage rates lowered builder confidence, but the Federal Reserve\’s decision not to change its quantitative easing program eased fears about rapidly rising mortgage rates.
- The federal government shutdown, along with builder and consumer concerns about the national debt ceiling also contributed to a dip in homebuilder confidence.
- National HMI results are comprised of homebuilder ratings of three factors. Homebuilders rated current market conditions at 58, which was two points lower than September\’s reading.
- Builder outlook for market conditions over the next six months fell by two points to October\’s reading of 62. The lowest reading came in at 44 for buyer foot traffic. This reading was also two points lower than the September reading.