Amidst signs of gradual inflation relief and expectations of stabilizing mortgage rates, the National Association of Home Builders reported on Thursday that homebuilder confidence in the United States has improved slightly more than anticipated for October.
According to the report, the NAHB/Wells Fargo Housing Market Index increased to 43 in October, following a rise to 41 in September. This figure surpassed economists' projections, who had anticipated a slight increase to 42.
"While housing affordability remains challenging, builders are more optimistic about market conditions anticipated in 2025," stated NAHB Chairman Carl Harris.
He further emphasized, "The upcoming election introduces a significant variable in the housing market outlook. With housing policy remaining a critical issue for candidates, policymakers should prioritize supply-side solutions to address the housing crisis."
This marks the second consecutive month of improvement in the housing market index, driven by gains across all three of its component indices.
Notably, the measure tracking sales expectations for the next six months saw a significant rise, increasing to 57 in October from 53 in September.
Additionally, the index reflecting current sales conditions advanced to 47 in October from 45 in September, while the indicator monitoring prospective buyer traffic rose to 29 from 27 in September.
In the latest HMI survey, the NAHB pointed out that the proportion of builders resorting to price cuts remained unchanged at 32 percent in October, consistent with the previous month.
Meanwhile, the average price reduction realigned with its long-term trend of 6 percent, up from a 5 percent dip observed in September, according to the NAHB.
The Commerce Department is set to release a separate report on new residential construction for September on Friday.
