Builder confidence hits ten-year high

​​​​​​WASHINGTON, D.C. – ​​​​​Builder confidence in the market for newly constructed single-family homes rose three points this month on the National Association​ of Home Builders/Wells Fargo Housing Market Index (HMI), returning to levels seen at the end of the 2005 housing boom.

According to NAHB Chief Economist David Crow, the three-point increase for October shows that builder confidence has been holding steady for five straight months and that the industry is strengthening at a gradual yet consistent pace.

Two of the three HMI components​ posted gains this month. The index measuring sales expectations in the next six months rose seven points to 75, and the component gauging current sales conditions rose three points to 70. However, the index charting buyer traffic held steady at 47. 

All four HMI regions posted gains. The West registered a five-point uptick to 69 while the Northeast, Midwest and South each rose one point to 47, 60 and 65, respectively. 

The NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as "good," "fair" or "poor." The survey also asks builders to rate traffic of prospective buyers as "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.