WASHINGTON (dpa-AFX) - Reflecting low interest rates and solid demand, the National Association of Home Builders released a report on Tuesday showing an unexpected improvement in U.S. homebuilder confidence in the month of September.
The report said the NAHB/Wells Fargo Housing Market Index inched up to 68 in September from an upwardly revised August reading of 67.
Economists had expected the index to come in unchanged compared to the 66 originally reported for the previous month.
With the unexpected uptick, the housing market index reached its highest level since a matching reading in October of 2018.
'Solid household formations and attractive mortgage rates are contributing to a positive builder outlook,' said NAHB Chief Economist Robert Dietz. 'However, builders are expressing growing concerns regarding uncertainty stemming from the trade dispute with China.'
He added, 'NAHB's Home Building Geography Index indicates that the slowdown in the manufacturing sector is holding back home construction in some parts of the nation, although there is growth in rural and exurban areas.'
The modest increase by the housing market index came as the index gauging current sales conditions rose to 75 in September from 73 in August.
The component measuring traffic of prospective buyers held steady at 50, while the measure charting sales expectations in the next six months edged down to 70 in September from 71 in August.
On Wednesday, the Commerce Department is scheduled to release a separate report on new residential construction in the month of August.
Economists expect housing starts to jump to an annual rate of 1.250 million in August after tumbling to a rate of 1.191 million in July.
Building permits, an indicator of future housing demand, are expected to drop to a rate of 1.300 million in August after spiking to a rate of 1.336 million in the previous month.
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