U.S. Home Builder Confidence Climbs in September, NAHB Says
A gauge of home-builder sentiment rose to its highest level since November 2005, a sign the U.S. housing market is shaking off worries about the global economy and volatile financial markets.
An index of builder confidence in the market for new single-family homes rose to a seasonally adjusted level of 62 in September, the National Association of Home Builders said Wednesday. A reading over 50 means most builders generally see conditions as positive.
The index stood at 61 in August and 60 in July. Economists surveyed by The Wall Street Journal expected a reading of 61 in September.
The index has been positive since July 2014, following five months in early 2014 when sentiment fell into in negative territory.
"Today's report is consistent with our forecast," said NAHB Chief Economist David Crowe. "Barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year."
One possible sticking point on the horizon: a rise in interest rates. On Wednesday the Federal Reserve begins a policy meeting where officials will decide whether to begin raising short-term interest rates, which could make mortgages more expensive. NAHB Chairman Tom Woods also noted that builders are continuing to report concerns about the availability of land and construction workers.
Historically low interest rates and rising rents have made a home purchase more appealing for those who can afford a down payment, but housing prices have also risen in much of the country. Although job growth has been steady over the past five years, wages have stayed relatively flat, making it harder for people to save for a home.
Write to Anna Louie Sussman at anna.sussman@wsj.com
(END) Dow Jones Newswires
09-16-15 1016ET
Copyright (c) 2015 Dow Jones & Company, Inc. 16 Sep 2015 10:32 EDT U.S. Home Builder Confidence Climbs in September, NAHB Says--Update
By Anna Louie Sussman
A gauge of home-builder sentiment this month rose to its highest level since November 2005, a sign the U.S. housing market is shaking off worries about the global economy and volatile financial markets.
An index of builder confidence in the market for new single-family homes rose to a seasonally adjusted level of 62 in September, the National Association of Home Builders said Wednesday. A reading over 50 means most builders generally see conditions as positive.
The index stood at 61 in August and 60 in July. Economists surveyed by The Wall Street Journal expected a reading of 61 in September.
The index has been positive since July 2014, following five months in early 2014 when sentiment fell into in negative territory.
"Today's report is consistent with our forecast," said NAHB Chief Economist David Crowe. "Barring any unexpected jolts, we expect housing to keep moving forward at a steady, modest rate through the end of the year."
One possible sticking point on the horizon: a rise in interest rates. On Wednesday the Federal Reserve begins a policy meeting where officials will decide whether to begin raising short-term interest rates, which could make mortgages more expensive. NAHB Chairman Tom Woods also noted that builders are continuing to report concerns about the availability of land and construction workers.
Historically low interest rates and rising rents have made a home purchase more appealing for those who can afford a down payment, but housing prices have also risen in much of the country. Although job growth has been steady over the past five years, wages have stayed relatively flat, making it harder for people to save for a home.
In late August, the Commerce Department reported new-home sales rose by 5.4% to a seasonally adjusted annual rate of 507,000, after unexpectedly sinking in June. Sales of existing homes climbed to their precession pace in July, the National Association of Realtors reported in August. The August existing-home sales figure will be released Sept. 21, and new-home sales data will be released Sept. 24.
The current-sales component of the index gained one point to reach 67. Expectations for sales over the next six months fell slightly to 68 from 70. A measure of traffic from prospective buyers rose two points to 47.
The three-month moving average of the builders gauge by region posted gains from the prior month's revised figures in every region except the Northeast, which slipped on point to 46. The West and South each ticked up one point to 64, while the Midwest rose one point to 59.
By Anna Louie Sussman