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First Cut: NAHB Housing Market Index for October highest since February 2018

The NAHB/Wells Fargo Housing Market Index rose 3 points to 71 in October after an unrevised 68 in September. The reading was the highest since 71 in February 2018 and 72 in January 2018. The index reflected a pick up in pace of present sales (78 after 75, highest since 79 in January 2018), a jump in expectations for sales (76 after 70, highest since 77 in May 2018), and increased buyer traffic (54 after 50, highest since 54 in February 2018).

Declines in mortgage interest rates are clearly helping drive sales and buyer interest in purchasing a new home. The Freddie Mac 30-year fixed rate for October to-date is at 3.57% after 3.61% in September. These are lows not seen in three years and are contributing to home affordability along with rising incomes and modest increases in home values.

Good optimism on the part of home builders should support starts of new homes at least into October and November, provided the weather cooperates.

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