Easing inflation and the anticipation of falling mortgage rates have led to an improvement in home builder sentiment, per the National Association of Home Builders (NAHB), who reported that their Housing Market Index increased two points to 43 in October.
What’s the bottom line? While home builder confidence remains below 50 in contraction territory, it has risen for two straight months after declining throughout the spring and summer. October also brought improvement in all three index components (buyer traffic, current and future sales expectations). Builders are clearly feeling better about the housing market over the next six months, as future sales expectations jumped 4 points and further into expansion territory above 50. NAHB Chair, Carl Harris, confirmed that “builders are feeling more optimistic about 2025 market conditions.”