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17.10.2024

U.S. homebuilder confidence improves slightly more than forecast in October

The National Association of Homebuilders (NAHB) announced on Thursday its housing market index (HMI) jumped to 43 in October from an unrevised September reading of 41. This was the highest reading since June (43).

Economists had forecast the HMI to rise to 42.

A reading over 50 indicates more builders view conditions as good than poor.

All three major HMI components posted advances in early October. The component charting sales expectations in the next six months surged 4 points to 57, while the component measuring traffic of prospective buyers climbed by 2 points to 29, and the component tracking current sales conditions also jumped 2 points to 47.

Commenting on the latest report, NAHB Chairman Carl Harris said that while housing affordability remains low, builders are feeling more optimistic about 2025 market conditions. "The wild card for the outlook remains the election, and with housing policy a top-tier issue for candidates, policymakers should be focused on supply-side solutions to the housing crisis," he added.

Meanwhile, NAHB Chief Economist Robert Dietz noted that despite the beginning of the Fed’s easing cycle, many prospective home buyers remain on the sideline waiting for lower interest rates. He also unveiled that they are forecasting "uneven declines for mortgage interest rates in the coming quarters, which will improve housing demand but place stress on building lot supplies due to tight lending conditions for development and construction loans."

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