Builder sentiment increased from 41 in September to 43 in October; anything below 50 is considered negative for the National Association of Home Builders’ monthly survey, according to NAHB. It reached a record high of 90 in November 2020.
All three components of the homebuilder index increased, with current sales conditions climbing two points to 47; buyer traffic increasing two points to 29; and sales expectations in the next six months rising four points to 57.
Easing inflation and the potential for lower mortgage rates reportedly contributed to the increase in homebuilding sentiment.
Thirty-two percent of builders reported cutting prices in October, which is unchanged from September. The average price discount rose to 6% in October after falling to 5% in September. Sixty-two percent of builders were using sales incentives other than price cuts to improve sales in October compared with 61% in September.
“While housing affordability remains low, builders are feeling more optimistic about 2025 market conditions,” said NAHB Chairman Carl Harris. “The wild card for the outlook remains the election, and with housing policy a top tier issue for candidates, policymakers should be focused on supply-side solutions to the housing crisis.”
