Builders’ sentiment jumped four points to 59, the highest level since November 2005, according to the September NAHB/Wells Fargo Housing Market Index. Many of the builders commented on the renewed interest by potential home buyers and higher traffic in their models and through their phone calls. Supporting those comments, all three components rose led by the traffic measure increasing to 47 from 42 in August, and the highest since October 2005. Indexes measuring current and future sales also rose five and two points respectively to levels last seen in 2013. Finally, all four regional three-month moving averages increased: Northeast up three points to 41, Midwest up five points to 59, South up four points to 56 and West up two points to 58.
The September rise wipes out the early year slump caused by unusually bad weather and some apparent renewed consumer reluctance. The inventory of new home for sale has increased to over 200,000. While well short of the typical 1990s and early 2000s inventory levels over of 300,000, the steady increase has provided a better selection for consumers. Builders continue to compete for a limited supply of lots and workers but buyers are beginning to see the advantage of low mortgage rates and competitive pricing.