Home-builder confidence reaches record high for third consecutive month

 The construction industry’s outlook continued to improve in October, according to research from a trade group released Monday.

The National Association of Home Builders’ monthly confidence index rose two points to a reading of 85 in October, the trade group said Monday.

This was the third month in a row in which the index reading hit a record high, and together with September’s figure, only the second time that the confidence measure was at or above 80.

Index readings over 50 are a sign of improving confidence. The index dropped below 50 in April and May as concerns related to the pandemic intensified.

The index that measures sentiment regarding current sales conditions increased two points to 90, while the index of expectations for future sales over the next six months rose three points to 88. The gauge regarding prospective buyers remained the same at 74.

At a regional level, though, confidence varied. The indexes for the Northeast and the West both increased seven points in October to readings of 88 and 95 respectively. But in the Midwest the index dropped one point to 77, and it fell two points in the South to 83.

“New single-family home sales are outpacing starts by a historic margin,” Robert Dietz, chief economist at the National Association of Home Builders, said in the report. “Bridging this gap will require either a gain in construction volume or reductions in available inventory, which is already at a historic low in terms of month’s supply.”