Homebuilder confidence in the U.S. unexpectedly jumped to another new record high in the month of November, the National Association of Home Builders revealed in a report released on Tuesday.
The report said the NAHB/Wells Fargo Housing Market Index climbed to 90 in November from 85 in October. Economists had expected the index to come in unchanged.
“Another record high for the HMI reflects that housing is a bright spot for the economy,” said NAHB Chief Economist Robert Dietz. “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front.”
He added, “In the short run, the shift of housing demand to lower density markets such as suburbs and exurbs with ongoing low resale inventory levels is supporting demand for home building.”
The unexpected increase by the housing market index came as all three of the HMI indices reached new record highs.
The index gauging current sales conditions climbed to 96 in November from 90 in October, while the measure charting traffic of prospective buyers rose to 77 from 74 and the component measuring sales expectations in the next six months inched up to 89 from 88.
“Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity,” said NAHB Chairman Chuck Fowke.
He added, “Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”
On Wednesday, the Commerce Department is scheduled to release its report on new residential construction in the month of October.
Housing starts are expected to climb to an annual rate of 1.460 million in October from 1.415 million in September, while building permits are expected to rise to a rate of 1.560 million from 1.545 million.
The material has been provided by InstaForex Company – www.instaforex.com
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