Homebuilder Optimism Continues To Grow

Optimism among the nation's home builders continues to build. The housing market index is up another point this month to 62 vs 61 in August. Recent readings have been 10 year highs. The best news in the report comes from the weakest component, traffic which is up 2 points to 47. This suggests that high rental prices may be pushing potential first-time buyers into the market.

The index's other two components remain unusually strong, at 67 for current sales and a 1 point gain and 68 for future sales which is down 2 points. Three of the report's four regions show plus-60 composite scores led by what is by far the largest region, the South at 66.

Supply of new homes is low as are interest rates and traffic is better, all important factors that are lifting confidence. Housing starts & permits data, which have been volatile but unmistakably strong, will be posted tomorrow morning.

Recent History Of This Indicator:
The housing market index, a measure of home builder sentiment, has been very strong this year, reflecting low supply in the new housing market. Forecasters see the index holding at 61 in September. Expectations of future sales have been the leading component in this report.