The National Association of Home Builders' index of builder sentiment fell in October, ending a four-month streak of gains. The group's Housing Market Index, a measure of homebuilder confidence in the market for newly built, single-family homes, lost five points in this month’s reading, bringing it to 54. The decline comes after last month’s four-point jump, which put the index close to a nine-year high.
All three index components lost ground in October, led by six-point declines in both the gauge of current single-family sales and the gauge of traffic from prospective buyers. The index measuring sales expectations in the next six months slipped three points, meanwhile. Despite the all-around decline, NAHB’s chief economist, David Crowe, remains optimistic, saying low mortgage interest rates, steady job gains, and significant pent up demand all point to continued growth in housing.
Freddie Mac released Thursday the results of its weekly Primary Mortgage Market Survey, showing the average 30-year fixed interest rate dropping 15 basis points to 3.97 percent for the week ending October 16th. The week's average marks the lowest level for the 30-year fixed-rate mortgage since the week of June 20th, 2013—which also happens to be the last time it averaged below 4 percent. Frank Nothaft, chief economist at Freddie Mac, said the decline in fixed rates stems from a drop in the 10-year Treasury bond yield, which dipped below 2 percent for a period as Europe’s economic situation grows more precarious.