Washington, DC, Oct. 16, 2013 -- Homebuilder confidence fell two points in October from a downwardly revised reading in the previous month to a level of 55 on the National Association of Home Builders/Wells Fargo Housing Market Index.
“Builder optimism remains above 50 and we are still seeing signs of pent-up demand in many markets across the country,” said NAHB Chairman Rick Judson.
“This slight dip in builder sentiment is the result of continuing challenges in the marketplace with regard to the cost and availability of labor and lots and uncertainty in Washington.”
NAHB Chief Economist David Crowe said, “A spike in mortgage interest rates along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation’s debt limit have caused builders and consumers to take pause.
“However, interest rates remain near historic lows and we don’t expect the level of rates to have a major impact on sales and starts going forward. Once this government impasse is resolved, we expect builder and consumer optimism will bounce back.”
All of the HMI’s three components each fell two points in October. The component gauging current sales conditions registered 58, while the component gauging sales expectations in the next six months posted a reading of 62 and the component gauging traffic of prospective buyers was 44.
NAHB estimates that the seasonally adjusted annual rate of construction for single-family homes was between 620,000 and 630,000 units in September, while the pace of construction of multifamily units was an additional 255,000 to 270,000.
“The NAHB estimate of 875,000 to 900,000 total housing starts is based on continuing improvement in single-family starts and ongoing volatility in multifamily construction,” said Crowe.