November NAHB Homebuilder Sentiment exceeded estimates this morning and improved sequentially, coming in at 58 versus expectations of an increase to 55 from 54 in October. At right we break down the changes within each sub index and the regional indices. Every index improved sequentially, a pattern we last saw in July. This is the first time since 2004 that all indices have improved sequentially in at least two monthly reports within the calendar year. Particularly strong were gains in the Northeast and West regions, where sentiment surged ahead of the cold weather we got over the last two weeks.
In a trend we've seen all through the recovery in the housing market since 2009, Traffic has continued to lag other indicators, indicating that while demand is adequate, it's not broad based. This tracks well with the notably suppressed household formation rate, mortgage production indices, and new home construction rates we've seen over the same period: not only can fewer Americans afford a home, many appear to be less interested in owning than has historically been the case. That said, as measured by the NAHB sentiment indices, the housing market is as healthy as it's been in years.
Below we chart the NAHB headline, sub index (since 1985) and regional series (since 2004).