Homebuilder sentiment took a sharp turn for the better this month as the monthly sentiment index from the NAHB rose back to its highest levels of the current recovery. While economists were forecasting the NAHB’s monthly sentiment index to come in at a level of 59, the actual reading came in at 65, which was last seen back in October. Relative to expectations, the September report was the strongest since July 2013. The table to the right breaks down this month’s report by category and region and shows the current levels for each relative to last month. As shown, Present Sales saw the biggest monthly gain and hit a new cycle high. On a regional basis, sentiment in the West saw a huge jump, rising by 14 points to its highest level since October 2005.
Finally, the chart to the right shows the regional sentiment indices for the NAHB going back to 2005. While all four sentiment indices essentially tracked each other closely from 2005 through the early stages of the current expansion, in recent years there has been a bit of a divergence as sentiment in the Northeast has been fading, sentiment in the Midwest has plateaued, while the South and Western regions remain in uptrends.