Builder confidence inched slightly higher in October, bringing it to its strongest level since June of 2006, according to the National Association of Home Builders/Wells Fargo Housing Market Index. The October gain also marks the sixth consecutive month for increases in the index, which measures builder confidence about the direction of the new-home market.
"Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year," says Barry Rutenberg, NAHB Chairman.
The monthly index measures builder perceptions of current single-family home sales, sales expectations, and buyer traffic.
While builders’ confidence about the recovery continues to improve, housing experts say there are still several challenges ahead for the new-home sector.
"The slight gain in builder confidence this month is an indication that, while still moving forward, the speed at which the housing recovery is proceeding is being moderated by the various constraints such as tight credit, difficult appraisals and more recently, the limited inventory of buildable lots in certain markets," says David Crowe, NAHB chief economist.