ConDig (17-Oct-17).  Confidence among US homebuilders shot back up in October to reach a 6-month high after sentiment in the market crumbled last month following the impact of two major hurricanes.

The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for newly-built single-family homes jumped up four points to 68 in October, its highest level since May.

Scores over 50 indicate that more builders view conditions as good rather than poor. The index stood at 63 in October last year.

“This month’s report shows that home builders are rebounding from the initial shock of the hurricanes,” said NAHB chairman Granger MacDonald.

“However, builders need to be mindful of long-term repercussions from the storms, such as intensified material price increases and labor shortages.”

All three HMI components posted gains in October. The component gauging current sales conditions rose five points to 75 and the index charting sales expectations in the next six months increased five points to 78. The component measuring buyer traffic ticked up a single point to 48.

Following the impact of Hurricane Harvey on the Houston area and Hurricane Irma across Florida, demand for homes has picked back up, along with work to repair the thousands of homes damaged by high winds and flooding.

Demand for homes in the US also continues to be underpinned by inventory shortages and a lack of skilled workers, while mortgage rates hold around near historic lows despite recent moves higher.

But concerns continue to lingering over whether growth in the sector this year could be hampered by further rises in mortgage rates that could leave many price-sensitive first-time buyers on the sidelines of the market, while labor and material costs continue to be elevated.