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First Cut: NAHB Housing Market Index highest since October 2018

The NAHB/Wells Fargo Housing Market Index for September inched up to 68 after a revised 67 in August (previously 66). It was the highest since 68 in October 2018 at the time when mortgage interest rates were stilling rising and at 4.83%, just below a near term peak of 4.87% in November 2018. Mortgage interest rates are now more than 150 basis points below that at an average of 3.53% for September to-date.

The composition of the index shows that low rates have brought out the buyers for new construction. The present sales index reached 75 in September after 73 in August and is the highest since 76 in May 2018. Expected sales declined marginally to 70 after 71 in the prior month, but have not varied much over the past seven months. Buyer traffic held at 50 in September and remained at its highest reading since 53 in October 2018.

Overall, the numbers suggest that there is still some life in the housing market for new properties in spite of concerns about a possible economic downturn.

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