NAHB Reports 15-Percent Decline in Starts but Builder Confidence Improves

According to the National Association of Home Builders (NAHB), housing starts fell nearly 15-percent in October to an annual rate of 1.486 million. NAHB said the decline is paced by a 16-percent drop in single-family production to 1.177 million. It further reported that three out of the four census regions declined, with the exception of the Northeast, and building permits fell for the ninth consecutive month in October to a rate of 1.535 million.

In spite of lower housing starts, according to the NAHB/Wells Fargo Housing Market Index (HMI), stabilizing conditions in the single-family housing market increased homebuilder confidence in November for the second consecutive month.

NAHB says the findings are derived from a monthly survey that it has been conducting for almost 20 years. According to the association, NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and expectations for the upcoming six-month period as "good," "fair" or "poor." It also says the survey asks builders to rate prospective buyer traffic as either "high to very high," "average" or "low to very low." NAHB then uses scores for each component to calculate a seasonally adjusted index. Any number over 50 indicates that more builders view sales conditions as good than poor.