US housebuilder sentiment improves in September
By Michele Maatouk
Date: Tuesday 17 Sep 2019
(Sharecast News) - Sentiment among US housebuilders improved a little in September, according to data released on Tuesday, although the trade spat between the US and China has been taking its toll.
The National Association of Home Builders/Wells Fargo housing market index ticked up to 68 this month from an upwardly-revised 67 in August, beating expectations for a reading of 66 and hitting its best level of the year.
The index measuring current sales conditions rose two points to 75, while the gauge measuring sales expectations in the next six months dipped one point to 70.
Looking at the three-month moving averages for regional housing market index scores, the Northeast saw a two-point increase to 59, while the West nudged up two points to 75 and the South edged one point higher to 70. The Midwest was unchanged at 57.
NAHB chief economist Robert Dietz said: "Solid household formations and attractive mortgage rates are contributing to a positive builder outlook. However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China.
"NAHB's home building geography index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas."
NAHB Chairman Greg Ugalde said: "Low interest rates and solid demand continue to fuel builders' sentiments even as they continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labour."
Pantheon Macroeconomics said: "The increase in the headline index was all in the current sales number, up to 75 from 73, while buyer traffic was unchanged at 50 and sales expectations dipped a point to 70. The details in any given month are less important than the trend which is responding, albeit slowly, to the plunge in mortgage rates since their peak in November last year.
"Homebuilders have been reluctant so far to increase production in line with the rise in new sales, perhaps fearing that the uncertainty triggered by the trade war will dampen buyers' confidence. At the same time, though, they don't want to lose share in a rising market. We expect the NAHB index and new home construction to rise further over the next few months, but the weakening labor market will be a problem next year."
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