The National Association of Homebuilders’ monthly housing market index jumped to 65 in September, matching an 11-month high that was the best for the measure of builder sentiment since 2005.
A release on Monday showed that it rose from a downwardly revised August print of 59, as rising household incomes boosted builders’ optimism.
“With the inventory of new and existing homes remaining tight, builders are confident that if they can build more homes they can sell them,” said Robert Dietz, the NAHB’s chief economist.
The latest US Census report on income and poverty showed last week that the median household income rose in real terms by 5.2% to $45,516, the biggest increase on record.
The NAHB’s index gauges how builders rate present and future market conditions for new home sales. It had been relatively flat over the past year, excluding a brief spike last October when activity rose ahead of the introduction of tighter rules on loan disclosure.
In September, all three components – currrent sales, sales expectations, and traffic of prospective buyers – improved.
“Though solid job creation and low interest rates are also fueling demand, builders continue to be hampered by supply-side constraints that include shortages of labor and lots,” Dietz added.