U.S. Homebuilder Confidence Matches All-Time High

Homebuilder confidence in the United States increased in August, for the third consecutive month, matching its record high, data showed on Monday.

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) increased by 6 points to 78, exceeding market expectations and matching its all-time high, which was recorded in 1998.

The reading is a sign that housing continues to lead the economy forward, according to the National Association of Home Builders.

“The demand for new single-family homes continues to be strong, as low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI.

“However, the V-shaped recovery for housing has produced a staggering increase for lumber prices, which have more than doubled since mid-April. Such cost increases could dampen momentum in the housing market this fall, despite historically low interest rates,”

said NAHB Chairman Chuck Fowke

“Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020.

“Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets,”

said NAHB Chief Economist Robert Dietz.