Home Builder Sentiment Up in November...But Home Sales Disagree

The NAHB homebuilder sentiment went from 54 in October to 58 in November. This November matches the second-highest level hit since 2005.

Reuters reports,

“November marked the fifth straight month with a reading above 50, which marks the threshold where more builders view market conditions as favorable than poor.”

Unemployment is down and mortgage rates are around 4%. However, wages aren’t growing and property values are going up which makes buying a home more expensive for many first-time buyers.

In terms of prospective buyer traffic, overall it is down but is near cycle highs. The Northeast’s prospective buyer traffic went from 39 to 51.

Though homebuilder sentiment and prospective buyer traffic are up, the graphs below suggest that this good news is accompanied by some harsh realities…

Graph that shows NAHB sentiment vs. Home Sales

Graph that shows HAHB Sentiment vs. Mortgage Applications

Read the article on Bloomberg

Graphs from Zero Hedge

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