Homebuilder Confidence Misses Expectations

NAHB homebuilder confidence came in at 54 in November.

This missed expectations for a reading of 55.

October’s number was revised down to 54, leaving homebuilder confidence unchanged for the month of November.

A reading over 50 shows that more builders think sales conditions are good rather than poor.

“Policy and economic uncertainty is undermining consumer confidence,” said NAHB Chief Economist David Crowe.

“The fact that builder confidence remains above 50 is an encouraging sign, considering the unresolved debt and federal budget issues cause builders and consumers to remain on the sideline.”

Strong Case-Shiller home prices and better than expected job growth “should bolster optimism about future sales,” Bank of America analysts wrote ahead of the data release. “Disappointing pending home sales offset some of this good news, but optimism should improve on net.”

Investors track this index because it is a leading indicator for housing starts. Though some like Paul Diggle at Capital Economics argue that NAHB has a “history of over-exuberance as a predictor of starts.”

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