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Homebuilders Have Never, Ever Been More Confident

Courtesy of ZeroHedge View original post here.

As Upton Sinclair is credited with saying, "it is difficult to get a man to understand something when his salary depends upon his not understanding it."

And that, some might argue, sums up the amazing surge in homebuilder sentiment in August, spiking from 72 to 78 (74 exp) – equalling its highest level in history (in Dec 1998)…

  • Measure of present single family sales rises to 84 vs 78 last month

  • Future single family sales gauge rises to 78 vs 75 last month

  • Prospective buyers traffic measure rises to 65 vs 57 last month

Source: Bloomberg

"Housing has clearly been a bright spot during the pandemic and the sharp rebound in builder confidence over the summer has led NAHB to upgrade its forecast for single-family starts, which are now projected to show only a slight decline for 2020," Robert Dietz, NAHB chief economist, said in a statement.

"Single-family construction is benefiting from low interest rates and a noticeable suburban shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets."

While home-buyer sentiment has rebounded from its depths, it remains notably decoupled from homebuilder exuberance…

Source: Bloomberg

Finally, we find the record high sentiment 'interesting' in light of the dramatic tightening of lending standard

Source: Bloomberg

It would seem that Sinclair could be right.


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