The NAHB housing market index (HMI) for September is out.
The headline index which is a gauge of homebuilder confidence came in right in line with expectations at 58.
August’s number was marginally revised down to 58, from 59.
Weaker new home sales and mortgage purchase applications are expected to filter through to homebuilder confidence.
“While builder confidence is holding at the highest level in nearly eight years, many are reporting some hesitancy on the part of buyers due to the sharp increase in interest rates,” said NAHB Chairman Rick Judson in a press release.
“Home buyers are adjusting to the fact that, while mortgage rates are still quite favourable on a historic basis, the record lows are probably a thing of the past.”
The sub-components of the HMI were mixed in September.
- The sub-index gauging current sales was unchanged at 62.
- The sub-index gauging expectations for the next six months fell three points to 65.
- The sub-index gauging the traffic of prospective buyers increased one point to 47.
A reading over 50 shows that more builders think sales conditions are good rather than poor.
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.”