Reflecting historic traffic numbers, the National Association of Home Builders released a report on Wednesday showing homebuilder confidence jumped to a record high in September.
The report said the NAHB/Wells Fargo Housing Market Index shot up to 83 in September from 78 in August. Economists had expected the index to come in unchanged.
With the unexpected increase, the index rose to its highest level in the 35-year history of the series, surpassing the previous record high of 78 that was set last month and also matched in December 1998.
“The the suburban shift for home building is keeping builders busy, supported on the demand side by low interest rates,” said NAHB Chief Economist Robert Dietz.
He added, “In another sign of this growing trend, builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating.”
The unexpected jump by the headline index came as the three component indexes also reached record highs in September.
The measure charting traffic of prospective buyers spiked to 73 from 64, the component measuring sales expectations in the next six months surged up to 84 from 78 and the index gauging current sales conditions climbed to 88 from 84.
However, NAHB Chairman Chuck Fowke noted many in the housing industry are worried about rising costs and delays for building materials, especially lumber.
“More domestic lumber production or tariff relief is needed to avoid a slowdown in the market in the coming months,” Fowke said.
On Thursday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of August.
Housing starts are expected to dip to an annual rate of 1.478 million in August after skyrocketing to a rate of 1.496 million in July.
Meanwhile, economists expect building permits, an indicator of future housing demand, to rise to a rate of 1.520 million after spiking to a rate of 1.495 million.
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