The NAHB/Wells Fargo Housing Market Index, set to release Monday, is a monthly measure of homebuilder sentiment. Previous reports have indicated strong homebuilder confidence, the sentiment index rose three points to 71 in October.
“The housing rebound that began in the spring continues, supported by low mortgage rates, solid job growth and a reduction in new home inventory,” said Greg Ugalde, NAHB Chairman.
Robert Dietz, NAHB Chief Economist, said the gains in single-family construction during the second half of 2019 is mirrored by the rise in builder sentiment over the past few months. Dietz, though, added builders “continue to remain cautious” due to ongoing supply considerations and concerns over an economic slowdown.
Worries of a possible recession in 2020 continue, as a report by the Council of Foreign Relations earlier this month forecasts for an economic slowdown to occur next year, possibly as soon as the 2020 Presidential Election.
The report references the years preceding the 2008 financial crisis, which saw a rising gap in the growth in home prices and household income, and a “parallel dynamic is playing out” today.
“In 2018, as in 2005, housing-price growth began falling rapidly, with significant price drops occurring in several major markets … The trend-line in existing-home sales growth has also been down since 2015, tipping into negative territory at the start of last year. Similar drops have preceded nearly every recession since 1970,” the report states.
All measurements in the HMI saw increases in October. The component measuring sales expectations in the next six months rose six points to 76. Also, the measure of prospective buyers rose four points to 54 in October.
Here's what else is happening in The Week Ahead
Housing Starts Report (November 19)
Banking, Housing, and Urban Affairs Hearing (November 20)
FOMC Minutes (November 20)
NAR Existing Home Sales Report (November 21)