Builder confidence in the market for new single-family homes was down two points in October (from a downwardly revised level in September) to 55 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
NAHB Chairman Rick Judson, a homebuilder from Charlotte, NC, said the October dip resulted from ongoing labor cost and availability challenges--as well as the uncertainty in Washington DC.
Judson added, "Builder optimism remains above 50 and we are still seeing signs of pent-up demand in many markets across the country."
"A spike in mortgage interest rates along with the paralysis in Washington that led to the government shutdown and uncertainty regarding the nation's debt limit have caused builders and consumers to take pause," said NAHB Chief Economist David Crowe. "However, interest rates remain near historic lows and we don't expect the level of rates to have a major impact on sales and starts going forward. Once this government impasse is resolved, we expect builder and consumer optimism will bounce back."
The three components of the HMI fell two points each in October 2013.
* The component gauging current sales conditions: 58
* The component gauging sales expectations in the next six months: 62.
* The component gauging traffic of prospective buyers: 44.
When the federal government shutdown prevented the U.S. Census Bureau from releasing a housing starts estimate for September, NAHB prepared an estimate of its own. NAHB estimated the seasonally adjusted annual rate of construction for single-family homes was between 620,000 and 630,000 units in September. The pace of construction of multifamily units added an estimated 255,000 to 270,000. The estimated pace of all September 2013 housing starts was between 875,000 and 900,000 units.
"The NAHB estimate of 875,000 to 900,000 total housing starts is based on continuing improvement in single-family starts and ongoing volatility in multifamily construction," said Crowe.
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