ByBrandon Kochkodin,
Forbes Staff.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index rose five points in October to 37, its highest level since April and the biggest month-over-month improvement since January 2024. The index, based on a monthly survey of single-family builders, measures confidence in current and expected sales conditions on a scale of 0 to 100. Readings above 50 indicate that more builders see conditions as good than poor, meaning that pessimism, while abating, is still widespread.
The October data is particularly useful for analysts trying to gauge housing activity during the government shutdown. With the Census Bureau expected to delay its housing construction report, NAHB says its index can serve as a proxy for trends in single-family permits. Robert Dietz, chief economist at NAHB said modeling of historical data suggests the October increase in builder sentiment points to about a 3% rise in September permits.
Created in 1985, the survey asks builders to rate current sales, expected sales over the next six months, and traffic of prospective buyers. The index hit a record high of 90 in late 2020 when mortgage rates hovered near historic lows, then plunged as rates climbed in 2022 from 83 in January of that year to 31 in December when the Federal Reserve raised interest rates by half a percentage point to the, then highest level in 15 years.
