Confidence among U.S. homebuilders rose more than expected in October on the strength of favorable economic conditions and low unemployment.
The National Association of Home Builders/Wells Fargo housing market index, which measures builder confidence in the newly built, single-family homes market, came in at 68 this month compared with September's reading and Econoday's forecast of 67.
The barometer used to track current sales conditions inched up one point to 74, and the gauge for expectations in the next six months increased one point to 75.
The measure of buyer traffic jumped four points to 53.
"Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment," NAHB Chairman Randy Noel said. "Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable."
Meanwhile, NAHB Chief Economist Robert Dietz warned that "unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019."