The sentiment of homebuilders reaches its highest level of the year

The housing industry index of the National Association of Home Builders / Wells Fargo rose 1 point to 68 points in September, well above expectations and at the highest level of the year.

This is also 1 point higher than a year earlier. The August reading, on the other hand, has been revised upwards by one point. The climate has collapsed to the recent level of 56% in December, when mortgage interest rates have skyrocketed. Anything above 50 on the index is considered positive.

A sharp drop in mortgage rates in August was clearly behind confidence in September. The average 30-year fixed rate rose from 3.96% in mid-July to 3.46% in the first week of September, according to Mortgage News Daily.

"Low interest rates and strong demand continue to fuel builders' sentiments, even as they continue to face the current supply-side challenges that keep homes from staying affordable, including a shortage of land and labor, "said NAHB President Greg Ugalde.

Of the three components of the survey, current sales conditions increased by 2 points to 75, buyer traffic remained stable at 50 and sales forecasts over the next six months fell 1 point to 70.

The survey came with warning signs, however. Mortgage rates rebounded in early September and the trade war between the United States and China continues to be a dark cloud for the industry.

"Builders are expressing growing concern over the uncertainties surrounding the trade dispute with China," said Robert Dietz, Chief Economist of NAHB. "NAHB's geographical construction index indicates that the slowdown in the manufacturing sector is slowing down the construction of homes in some parts of the country, although there is growth in rural and peri-urban areas. "

The lack of supply is the main obstacle to a stronger recovery of the current housing market. The vast majority of new construction is still in the mid to high price range, but demand is strongest at the entry level. Young buyers today are also more interested in urban and suburban homes than previous generations, and most of the construction is not growing.

With regard to the three-month moving averages for the regional scores, the Northeast increased by 2 points to 59, the West also increased by 2 points to 75 and the South by 1 point to 70. The Midwest remained unchanged at 57.