US homebuilder confidence hits 11-month high in September

Sentiment among US homebuilders in September improved to its highest level since October last year.

The National Association of Home Builders/Wells Fargo housing market index pushed up to 65 from 59 the month before, comfortably beating expectations for a reading of 60. This marked an 11-month high.

The component gauging current sales conditions jumped six points to 71 while the index charting future sales expectations added five points to 71.

Meanwhile, the component that measures buyer traffic was up four points at 48.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the figures were a welcome catch-up after inexplicable sluggishness.

“We have been frustrated by the stubborn refusal of the homebuilders to react to the increase in mortgage demand and new home sales this year, but this report makes up all the lost ground. The numbers are strong across the board, with hefty increases in current sales, expected future sales and buyer traffic.

“The survey is not a consistently reliable leading indicator of market activity and construction, but it is
another piece of evidence pointing to a firming housing market. The relapse in mortgage demand in the summer remains a concern, though the very latest data suggest that applications volumes have returned to their spring high.”