Builder sentiment rose in November for the third straight month as they expect market conditions will improve under Republican control of both the White House and Congress, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
The index tracking current sales conditions increased two points to 49. The part measuring sales expectations over the next six months increased seven points to 64, and the gauge tracking traffic of prospective buyers rose three points to 32. Nearly one-third of builders reduced home prices in November, according to the report. The use of sales incentives was 60 percent, down from 62 percent the previous month.
“With the elections now in the rearview mirror, builders are expressing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments,” said NAHB Chair Carl Harris. “This is reflected in a huge jump in builder sales expectations over the next six months.”
NAHB Chief Economist Robert Dietz said the continued lack of labor and buildable lots, along with high building material prices, still pose headwinds to the industry. “Moreover, while the stock market cheered the election result, the bond market has concerns, as indicated by a rise in long-term interest rates. There is also policy uncertainty in front of the business sector and housing market as the executive branch changes hands.”
Single-family authorizations increased a half-percent in October to 968,000 from 963,000 the previous month, according to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Privately-owned housing units authorized by building permits fell 0.6 percent to 1.41 million from 1.42 million, and is 7.7 percent under its year-earlier mark of 1.53 million.
Other October report findings included:
- Privately-owned housing starts fell 3.1 percent to 1.31 million from 1.35 million the previous month.
- Single-family housing starts fell 7 percent to 970,000 from 1.04 million in September. Single-family housing completions fell 1.4 percent to 986,000 from 1 million.
