Homebuilder sentiment hit a new six-year high in October, according to the National Association of Home Builders/Wells Fargo housing market index. The index rose by 1 point to 41, but was slightly below economists’ expectations for a reading of 42.
Builders slipped immediately after the news, even as the overall market continued its strong rise; the Dow was recently up more than 100 points.
Lennar (LEN) fell 0.7%; KB Home (KBH) was trading flat after rising earlier in the morning; DR Horton (DHI) was down 0.8%; and Toll Brothers (TOL) was off 0.7%.
The NAHB chairman expressed some concern about tight credit conditions, a constant recent complaint by builders and their representatives.
�Many builders are reporting increases in the number of serious buyers visiting their sales offices, and the overall confidence measure is much higher than it was at this time last year,� noted NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. �The concern is that, even though demand for new homes is rising, overly tight credit conditions are still constraining new building and new purchases at a time when that kind of economic activity and the job growth it generates are greatly needed.�
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