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First Cut: NAHB Housing Market Index remained strong in November

The NAHB/Wells Fargo Housing Market Index for November remained strong at 70, a scant decrease from the 71 in October that was the highest since 71 in February 2018. Conditions for homebuilders were not much changed month-over-month as mortgage interest rates ticked marginally higher. Compared to the same time last year when mortgage rates reached a near term peak and choked off activity, 2019 has shown fairly steady upward momentum.

Sales were off a bit at 76 in November after a near-term peak of 78 in October, the highest since 79 in January 2018. Expected sales eked out a 1 point gain to 77, the highest since 77 in May 2018 just when mortgage rates began an upswing. Buyer traffic edged down to 53 in November after 54 in October when it was the highest since 54 in February 2018.

Homebuilders may be a trifle less optimistic in early November 2019, but these are consistently the best conditions seen in nearly two years. Unless mortgage rates take a sharp turn higher, the outlook for homebuilders should remain positive heading into the winter months.

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