In a continuing display of a strong market rebound following the coronavirus outbreak earlier this year, builder confidence for newly built single-family homes increased by two points to 85 in October. This figure surpasses the previous all-time high of 83 as reported in September, according to the latest NAHB/Wells Fargo Housing Market Index (HMI). According to NAHB’s index, any number over 50 indicates that more builders view conditions as good than poor.
On a regional level, the Northeast HMI increased six points to 82, while the Midwest Index increased by three points to 75. In the South, the Index increased three points to 82, and in the West it increased by five points to 90.
“Traffic remains high and record-low interest rates are keeping demand strong as the concept of ‘home’ has taken on renewed importance for work, study and other purposes in the COVID era,” said NAHB Chairman Chuck Fowke, a custom home builder from Tampa, Fla. “However, it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times.”
“The housing market continues to be a bright spot for the economy, supported by increased buyer interest in the suburbs, exurbs and small towns,” said NAHB Chief Economist Robert Dietz. “NAHB analysis published last week showed that new single-family home sales are outpacing starts by a historic margin. Bridging this gap will require either a gain in construction volume or reductions in available inventory, which is already at a historic low in terms of month’s supply.”