FX.co ★ U.S. Homebuilder Confidence Improves Much More Than Expected In November

In an encouraging development, U.S. homebuilder confidence surged beyond expectations in November, as highlighted in a report by the National Association of Home Builders (NAHB) released on Monday. The NAHB/Wells Fargo Housing Market Index saw an uptick, reaching 46, up from October's 43, surpassing economists' projections, which anticipated a rise to only 44.

This notable increase positions the index at its highest since it registered 51 in April. NAHB Chairman Carl Harris commented on this positive shift, attributing it to builder optimism in the wake of the recent election results. Builders are hopeful that the Republican control in Washington will lead to significant regulatory reforms beneficial to the housing sector, potentially spurring the construction of more homes and apartments.

The housing market index improvement is underpinned by growth across all three of its sub-indices. A particularly notable surge occurred in the component assessing future sales expectations, which jumped to 64 in November from October’s 57. Additionally, the index gauging traffic of prospective buyers rose to 32 from 29, while the index measuring current sales conditions increased to 49 from 47 in the respective months.

According to the latest Home Market Index (HMI) survey, around 31 percent of homebuilders reduced prices in November, a figure that has remained consistently between 31 to 33 percent. The average price reduction was recorded at 5 percent, representing a slight decrease from October's 6 percent.

Separately, the Commerce Department is set to release a report on Tuesday detailing new residential construction for October. Market analysts expect a decline, with housing starts projected to fall to an annual rate of 1.340 million, following a dip to 1.354 million in September.