The National Association of Home Builders (NAHB)/Wells Fargo housing market index for August rose two points to 55 from a reading of 53 in July. The reading was higher than a consensus forecast of 53 from a Bloomberg survey and was the highest reading this year, but it was still a bit short of last year’s peak of 58. August is the third consecutive month to post a yearly high index reading.
An index reading above 50 indicates that more builders view sales conditions as good than view them as poor. The June index marked the fifth consecutive month with a reading below 50.
The current sales conditions subindex rose two points in August to 58 and the sales expectations subindex rose to 65, also up two points month-over-month. The subindex that estimates prospective buyer traffic rose three points to 42.
The NAHB’s chief economist noted:
[B]uilder confidence appears to be firming following an uneven spring. Factors contributing to this rise include sustained job growth, historically low mortgage rates and affordable home prices, which are helping to unleash pent-up demand.
The three-month moving average index rose in all four regions of the country. The South gained one point to post a 52 index score, and the Northeast region rose two points to 38. In the Midwest, confidence rose seven points to 55, and in the West the index rose four points to 56.
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