US housebuilder sentiment unexpectedly improves in October

Sentiment among US housebuilders unexpectedly improved in October, according to data released on Tuesday.

The National Association of Home Builders/Wells Fargo housing market index edged up one point from September to 68, beating expectations for an unchanged reading.

The index of current sales conditions ticked up one point to 74 while the gauge for expectations in the next six months rose to 75 from 74 in September. Meanwhile, the index measuring buyer traffic was four points higher at 53.

Regionally and on a three-month moving average, the index for housebuilder sentiment in the Northeast rose three points to 57, while the index for the South edged up one pint to 71. The index for the West was steady at 74 and the gauge for the Midwest declined two points to 57 in October.

NAHB Chairman Randy Noel said: "Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment. Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable."

NAHB chief economist Robert Dietz said: "Favourable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases. Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019."