Confidence among home builders rose in November, a sign of solid momentum in the housing market in the penultimate month of 2017.
The National Association of Home Builders housing market index rose to 70 this month from an unrevised 68 in October, the trade group said Thursday.
Continue Reading Below
November's reading on confidence in the market for newly-built single-family homes is the highest since March, when the index touched a post-housing bubble peak, and the second-highest reading since July 2005.
A reading over 50 means most builders generally see conditions in the single-family housing market as positive. Economists surveyed by The Wall Street Journal expected a reading of 67 for November.
NAHB Chairman Granger MacDonald said November's reading is "a strong indicator that the housing market continues to grow steadily," but he pointed to continuing constraints on builders, like lot and labor shortages and construction material price increases.
Tight inventory is also being felt elsewhere in the housing market. Sales of existing homes, which account for the bulk of houses sold in the U.S., declined in September on an annual basis for the first time since July 2016, suggesting a chronic shortage of homes for sale is beginning to take a bigger toll on the market.
Borrowing costs remain historically low, even though the Federal Reserve has raised short-term interest rates twice this year to a current range between 1% and 1.25%. Fed officials have penciled in one further quarter-percentage-point rate increase this year.
The rate on a 30-year fixed-rate mortgage averaged 3.90% in the week that ended Nov. 9, according to Freddie Mac, down slightly from 3.94% the week before.
Write to Harriet Torry at firstname.lastname@example.org
(END) Dow Jones Newswires
November 16, 2017 10:14 ET (15:14 GMT)