U.S. homebuilder confidence advanced in October to a fresh all-time high as record-low interest rates continued to fuel sales and the demand outlook.
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The booming housing market has been a bright spot for the economy since the coronavirus lockdowns eased. Declining mortgage rates are making it easier for buyers interested in purchasing larger homes or relocating to suburbs as houses are increasingly viewed as remote workplaces in light of the pandemic.
“The concept of ‘home’ has taken on renewed importance for work, study and other purposes in the Covid era,” Chuck Fowke, chairman of NAHB, said in a statement. “However, it is becoming increasingly challenging to build affordable homes as shortages of lots, labor, lumber and other key building materials are lengthening construction times.”
Housing inventory remains lean and has kept home prices elevated. Also, shortages of some building materials and labor may restrain the hot housing market. The price of lumber, while down from its peak in mid-September, is still higher than any time last year. The stalemate in Congress over additional stimulus also risks slowing housing momentum.
The NAHB’s gauge of current single-family home sales rose by 2 points to a record 90 in October, while a measure of the outlook for purchases climbed 3 points to an all-time high of 88. The group’s index of prospective buyer traffic held at 74.
By region, builder sentiment in the West and Northeast rose to the highest levels on record, while confidence eased in the South and Midwest.
Homebuilders’ continuing optimism has driven an index of homebuilder stocks to a record high. The index has surged about 170% from this year’s low in March.
